Small business owners in America are feeling their gloomiest in nearly five decades, a survey released Tuesday morning showed.
The National Federation of Independent Business (NFIB) said its gauge of businesses expecting better business conditions over the next six months fell to the worst reading in the 48-year history of the survey. This measure’s previous all-time high was set in April.
Inflation continues to be a problem for small businesses with 28 percent of owners reporting it is their single most important problem in operating their business. That is below the 32 percent recorded in April, the highest reading since the fourth quarter of 1980.
“Inflation continues to outpace compensation which has reduced real incomes across the nation,” said NFIB Chief Economist Bill Dunkelberg. “Small business owners remain very pessimistic about the second half of the year as supply chain disruptions, inflation, and the labor shortage are not easing.”
The net percent of owners raising average selling prices increased two points to a net 72 percent, back to the highest reading in the 48-year-history of the survey last reached in March. This reading is up 40 percentage points since May of last year.
Consumer prices rose 8.6 percent in May, according to the index released by the Bureau of Labor Statistics last week. That is the highest rate of inflation since 1981.
The NFIB said its broad gauge of Small Business Optimism Index ticked down one basis point in May to 93.1. This was the fourth consecutive month of below average scores for that index.
Fifty-one percent of owners reported job openings that could not be filled, up four points from the April and March readings.
Instead of relief for supply chain problems, these appear to be getting worse. Thirty-nine percent of owners report that supply chain disruptions have had a significant impact on their business, up three points from April. Another 31 percent report a moderate impact and 22 percent report a mild impact. Only eight percent say there has been no impact from the recent supply chain disruptions.
The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the 4th quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in May 2022.
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