NFIB Survey: Inflation Surpasses Labor Quality as Top Concern
WASHINGTON – Inflation has replaced labor quality as small business owners’ top concern, according to the NFIB Small Business Optimism Index.
The NFIB Small Business Optimism Index increased 1.3 points in December to 91.9, marking the 24th consecutive month below the 50-year average of 98. Twenty-three percent of small business owners reported that inflation was their single most important problem in operating their business, up 1 point from last month.
“Small business owners remain very pessimistic about economic prospects this year,” said Bill Dunkelberg, NFIB chief economist. “Inflation and labor quality have consistently been a tough complication for small business owners, and they are not convinced that it will get better in 2024.”
Key findings include:
- Small business owners expecting better business conditions over the next six months improved 6 points from November to a net negative 36% (seasonally adjusted), and 25 percentage points better than last June’s reading of a net negative 61%.
- Seasonally adjusted, a net 29% of owners plan to raise compensation in the next three months, down 1 point from November.
- The net percent of owners raising average selling prices was unchanged from November at a net 25% (seasonally adjusted).
- The net percent of owners who expect real sales to be higher improved 4 points from November to a net negative 4% (seasonally adjusted), the highest reading since January 2022.
Fifty-eight percent of owners reported capital outlays in the next six months, down 3 points from November. Of those making expenditures, 40% reported spending on new equipment, 22% acquired vehicles and 19% improved or expanded facilities. Eleven percent spent money on new fixtures and furniture, and 5% acquired new buildings or land for expansion. Twenty-four percent (seasonally adjusted) plan capital outlays in the next few months, up 1 point from November.
Published by The Business Journal, Youngstown, Ohio.
