NFIB: Small business expectations for better trading conditions at record low, lowest in 48 years

Below is a press release from the National Federation of Independent Business:

Homeowners expecting better conditions in next six months drop as 32% cite inflation as number one business issue

the NFIB Small Business Optimism Index was unchanged in April, remaining at 93.2 and the fourth straight month below the 98-for-48-year average. 48 year survey.

Inflation continues to be a problem for small businesses, with 32% of small business owners saying it’s their biggest problem running their business, the highest number since the fourth quarter of 1980 .

“Small business owners are struggling to cope with inflationary pressures,” said Bill Dunkelberg, NFIB Chief Economist. “Labour supply does not respond strongly to high wage offers from small businesses and the impact of inflation has significantly disrupted business operations.”

Key findings include:

– Forty-seven percent of owners reported job openings that could not be filled, unchanged from March.

– The net percentage of owners raising average selling prices fell two points to 70% net (seasonally adjusted), two points below last month’s high.

– The net percentage of owners expecting actual sales to be higher increased six points from March to a negative net result of 12%.

As noted in the NFIB’s monthly jobs report, small businesses continue to struggle to find workers to fill vacancies, with 47% (seasonally adjusted) of all owners reporting job openings they don’t. could not fill during the current period. Of those who are hiring or trying to hire, 93% of owners reported few or no qualified candidates for the positions they were trying to fill.

Fifty-four percent of owners reported capital spending in the past six months, down two points from March. Among owners who incurred expenses, 40% said they purchased new equipment, 24% acquired vehicles and 14% improved or expanded facilities. Eight percent acquired new buildings or land for expansion and 11% spent money on new fixtures and furniture. Twenty-seven per cent of owners expect capital spending in the coming months, up one point from March.

Seasonally adjusted, 3% of all owners reported higher nominal sales over the past three months, down one point from March and a poor reading. The net percentage of owners expecting higher actual sales volumes rose six points to a negative net result of 12%.

The net percentage of owners reporting inventory increases rose four points to 4% net. Nineteen percent of owners reported increases in inventory while 15% reported reductions as strong sales reduced inventory at many businesses.

Thirty-six percent of owners said supply chain disruptions had a significant impact on their business. Another 34% report moderate impact and 20% report mild impact. Only 8% of owners reported no impact from recent supply chain disruptions.

Up three points from March, a net 6% of owners considered current inventory to be “too low” in April. A net 1% of owners plan to invest in stocks in the coming months, down one point from March.

The net percentage of homeowners raising average selling prices fell two points from March’s record high of 70% net (seasonally adjusted). Four percent reported lower average selling prices and 70% reported higher average prices. Price increases were most frequent in wholesale trade (85% higher, 0% lower), construction (81% higher, 3% lower), retail trade (76% higher, 4% lower) and manufacturing (70% higher, 3% lower). lower). A net 46% of owners expect price increases (seasonally adjusted data).

A net percentage of 46% (seasonally adjusted) said they had increased their compensation, down three points from March. A net 27% of owners plan to increase compensation in the next three months. Eight percent of owners cited labor costs as their top business issue and 23% said the quality of labor was their top business issue.

The frequency of reporting positive earnings trends was a net negative 17%. Of owners reporting lower profits, 34% blamed rising cost of materials, 22% blamed lower sales, 14% cited usual seasonal change, 11% cited labor costs , 9% cited lower prices and 2% cited higher taxes. or regulatory costs. For owners reporting higher profits, 51% credited sales volumes, 13% cited usual seasonal changes, and 19% cited higher prices.

Two percent of homeowners said all of their borrowing needs were not met. Twenty-six percent of homeowners said all of their credit needs were met, and 61% said they weren’t interested in a loan.

the NFIB Research Center has collected data on small business economic trends with quarterly surveys since 4and 1973 quarter and monthly surveys since 1986. Survey respondents are randomly selected from NFIB members. The report is released on the second Tuesday of each month. This survey was conducted in April 2022.

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