WASHINGTON — According to findings from the latest Small Business Economic Trends survey by the National Federation of Independent Business (NFIB), small-business owners are still not feeling optimistic in the current economic environment. The NFIB’s Optimism Index decreased 0.1 points in October to 90.7, marking the 22nd month below the 50-year average. The last time the Optimism Index was at or above the average was December 2021.
“This month marks the 50th anniversary of NFIB’s small business economic survey,” said NFIB Chief Economist Bill Dunkelberg. “The October data shows that small businesses are still recovering, and owners are not optimistic about better business conditions. Small-business owners are not growing their inventories as labor and energy costs are not falling, making it a gloomy outlook for the remainder of the year.”
Key findings from the study include:
- Twenty-two percent of owners reported that inflation was their single most important problem in operating their business, down one point from last month.
- Owners expecting better business conditions over the next six months was unchanged from September at a net negative 43% (seasonally adjusted).
- Forty-three percent (seasonally adjusted) of owners reported job openings that were hard to fill, unchanged from September and remains historically very high.
- A net negative 17% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down nine points from September and the lowest reading since July 2020.
- Seasonally adjusted, a net 24% plan to raise compensation in the next three months, up one point from September.
- The frequency of reports of positive profit trends was a net negative 32%, down eight points from September.
The NFIB’s monthly jobs report found that a seasonally adjusted net 17% of owners plan to create new jobs in the next three months. Overall, 61% of owners reported hiring or trying to hire in October. Of those hiring or trying to hire, 90% of owners reported few or no qualified applicants for the positions they were trying to fill.
Seasonally adjusted, a net 36% of owners reported raising compensation, unchanged from September. A seasonally adjusted net 24% of owners plan to raise compensation in the next three months, up one point from September. Nine percent cited labor costs as their top business problem and 23% said that labor quality was their top business problem.
A net negative 17% (seasonally adjusted) of all owners reported higher nominal sales in the past three months, down nine points from September and the lowest reading since July 2020. The net percent of owners expecting higher real sales volumes improved three points to a net negative 10%.
The net percent of owners raising average selling prices increased one point from September to a net 30% seasonally adjusted. Twenty-two percent of owners reported that inflation was their single most important problem in operating their business, down one point from last month.
The NFIB also reported that 57% of owners reported capital outlays in the last six months, unchanged from September. Of those making expenditures, 37% reported spending on new equipment, 24% acquired vehicles, and 18% improved or expanded facilities. Twelve percent spent money on new fixtures and furniture and 7% acquired new buildings or land for expansion. Twenty-four percent of owners plan capital outlays in the next few months.
The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth 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 October 2023.
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