WASHINGTON — According to the findings of the latest survey by the Research Center of the National Federation of Independent Business (NFIB), business owners entered 2023 with lowered confidence in the new year.
The NFIB Small Business Optimism Index declined 2.1 points in December to 89.8, marking the 12th consecutive month below the 49-year average of 98. Owners expecting better business conditions over the next six months worsened by eight points from November to a net negative 51%.
Inflation remains the single most important business problem with 32% of owners reporting it as their top problem in operating their business.
“Overall, small-business owners are not optimistic about 2023 as sales and business conditions are expected to deteriorate,” says NFIB Chief Economist Bill Dunkelberg. “Owners are managing several economic uncertainties and persistent inflation and they continue to make business and operational changes to compensate.”
Key findings include:
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Forty-one percent of owners reported job openings that were hard to fill, down three points from November but historically very high.
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The net percent of owners raising average selling prices decreased eight points to a net 43% (seasonally adjusted), historically high.
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The net percentage of owners who expect real sales to be higher worsened by two points from November to a net negative 10%.
The NFIB’s monthly jobs report showed that owners’ plans to add positions remain elevated, with a seasonally adjusted net 17% planning to create new jobs in the next three months. Overall, 55% of owners reported hiring or trying to hire in December. Ninety-three percent of those hiring or trying to hire reported few or no qualified applicants for the positions they were trying to fill.
Seasonally adjusted, a net 44% of owners reported raising compensation. A net 27% plan to raise compensation in the next three months, down one point from November. Eight percent of owners cited labor costs as their top business problem and 23% said that labor quality was their top business problem.
The net percent of owners raising average selling prices decreased eight points from November to a net 43% seasonally adjusted, the lowest level since May 2021. Unadjusted, 12% reported lower average selling prices and 51% reported higher average prices.
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 information from this survey was conducted in November 2022.
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