NFIB Survey: Small-Business Optimism Dips in September

COLUMBUS, Ohio – The NFIB Small Business Optimism Index fell by half of a point in September to 90.8 as business owners “remain pessimistic” about the economy. 

September’s survey marks the 21st consecutive month below the 49-year average of 98. 

Twenty-three percent of business owners listed inflation as the single greatest problem in operating their business, tied with labor quality.

“Owners remain pessimistic about future business conditions, which has contributed to the low optimism they have regarding the economy,” said Bill Dunkelberg, NFIB chief economist. “Sales growth among small businesses have slowed and the bottom line is being squeezed, leaving owners few options beyond raising selling prices for financial relief.” 

State-specific results are unavailable, but Chris Ferruso, NFIB state director, said, “Inflation means higher prices across the board, and that’s squeezing the budgets of Ohio’s small businesses. It’s also eroding people’s purchasing power, which only adds to the financial pressure on Main Street businesses.”

Here are the key findings from the survey: 

• Small business owners expecting better business conditions over the next six months deteriorated 6 points from August to a net negative 43% (seasonally adjusted). However, that’s 18 percentage points better than last June’s reading of net negative 61%.  

• Forty-three percent (seasonally adjusted) of owners reported job openings that were hard to fill, up 3 points from August and remaining historically high as owners can’t hire enough workers due to few qualified applicants. 

• Seasonally adjusted, a net 23% plan to raise compensation in the next three months, down 3 points from August. 

• The net percent of owners raising average selling prices increased 2 points to a net 29% (seasonally adjusted). 

• The net percent of owners who expect real sales to be higher increased 1 point from August to a net negative 13% (seasonally adjusted). 

According to NFIB’s jobs report, 43% (seasonally adjusted) of all small-business owners reported job openings they could not fill in the current period, up 3 points from August. Owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 18% planning to create new jobs in the next three months.

Fifty-seven percent of owners reported capital outlays in the past six months. Of those making expenditures, 41% reported spending on new equipment, 22% acquired vehicles and 17% improved or expanded facilities. Twelve percent of owners 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. 

A net negative 8% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up 6 points from August’s lowest reading since August 2020. The net percent of owners expecting higher real sales volumes improved 1 point to a net negative 13%.  

The net percent of owners raising average selling prices increased 2 points from August to a net 29% (seasonally adjusted). Twenty-three percent of owners reported that inflation was their single most important problem in operating their business, unchanged from last month and tied with labor quality as the top problem. 

Unadjusted, 13% of owners reported lower average selling prices, and 41% reported higher average prices. Price hikes were the most frequent in finance due to rising interest rates (75% higher, 3% lower), construction (53% higher, 6% lower), retail (49% higher, 11% lower), services (33% higher, 12% lower) and wholesale (33% higher, 10% lower). Seasonally adjusted, a net 30% plan price hikes. 

Published by The Business Journal, Youngstown, Ohio.