Last month, the National Federation of Independent Business’ Optimism Index decreased by 1.4 points to 95.7, the second consecutive month below the 48-year average of 98. Twenty-six percent of owners reported that inflation was their single most important problem in operating their businesses, a four-point increase since December – and the highest reading since the third quarter of 1981.
“Inflation continues to be a problem on Main Street, leading more owners to raise selling prices again in February,” said NFIB Chief Economist Bill Dunkelberg. “Supply chain disruptions and labor shortages also remain problems, leading to lower earnings and sales for many.”
Key findings included:
- The net percent of owners raising average selling prices increased seven points to a net 68 percent (seasonally adjusted), a 48-year record high reading.
- Owners expecting better business conditions over the next six months decreased two points to a net negative 35 percent.
- Forty-eight percent of owners reported job openings that could not be filled, an increase of one point from January.
Price-raising activity over the last 12 months has continued to escalate, reaching levels not seen since the early 1980s, when prices were rising at double-digit rates. Price hikes were the most frequent in retail (79 percent higher, 4 percent lower), wholesale (77 percent higher, 4 percent lower), construction (73 percent higher, 3 percent lower) and manufacturing (72 percent higher, 6 percent lower).
In addition, 93 percent of owners hiring or trying to hire reported few or no qualified applicants for their open positions.
Moreover, 57 percent of owners reported capital outlays in the last six months, down one point from January. Of those owners making expenditures, 41 percent reported spending on new equipment, 21 percent acquired vehicles, and 14 percent improved or expanded facilities. Seven percent acquired new buildings or land for expansion, and 11 percent spent money for new fixtures and furniture. Twenty-seven percent of owners plan capital outlays in the next few months, down two points from January.
Thirty-seven percent of owners report that supply chain disruptions have had a significant impact on their business. Another 33 percent report a moderate impact and 21 percent report a mild impact. Only 8 percent of owners report no impact from the recent supply chain disruptions.
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 the NFIB’s membership.
