The National Federation of Independent Business released its annual survey measuring the sentiment of small business owners, and their sentiment is not upbeat.
According to the survey that was released Tuesday morning, small business owners are feeling the least optimistic they have in the 48 years the survey has been taken. The previous all time high was registered in April.
28 percent of business owners report that inflation is the single biggest problem they have running their business. That is less than the 32 percent who said that in April, which was the highest reading since late 1980.
NFIB Chief Economist Bill Dunkelberg said, “Inflation continues to outpace compensation which has reduced real incomes across the nation. Small business owners remain very pessimistic about the second half of the year as supply chain disruptions, inflation, and the labor shortage are not easing.”
72% of sellers reported increasing selling prices, up 2 percentage points since April. That is a number which was last touched in March, and it is the highest reading the survey has reached. That number is 40 percentage points higher than it was one year prior in May of 2021.
In May the Consumer Price Index rose 8.6%, the highest rate of inflation since 1981.
In the NFIB survey, the Small Business Optimism Index dropped 0.1% to 93.1, making this the fourth consecutive month of below-average scores on that measure.
51% of business owners reported not being able to fill a job opening, four points higher than both April and March.
Meanwhile supply chain issues appear to be getting worse, perhaps due to China’s Covid lockdowns. The percentage of business owners saying they had a significant impact on their business was 39%, up 3 points from April. 31% said it was having a moderate impact, and 22% reported a mild impact. 8% said it had no impact.
The Small Business Economic Trends survey has been conducted by the NFIB Research Center quarterly since the 4th quarter of 1973, and monthly since 1986. Released on the second Tuesday of every month, the survey chooses respondents randomly from NFIB’s membership rolls.
