The latest NFIB report indicates that Main Street Businesses are still “deeply concerned” about the direction of the national economy.
The most recent NFIB Small Business Optimism Index showed inflation to once again be the top concern for small businesses this month as the index increased 0.4 points in May to 89.4. The rating remains below the 49-year average of 98 for the 17th consecutive month.
Expectations for better business outcomes are also on the decline.
Roughly 25% of business owners nationwide say inflation is the single most important problem they are facing right now. That number is up two points from last month. The next highest concern remains labor quality at 24%, which was the highest concern for businesses in May.
According to Dawn McVea, State Director for the NFIB in Mississippi, the trends are also reflected in Mississippi.
“It costs more to run a small business than it did last summer and uncertainty about the cost of doing business is making it hard for owners to plan ahead,” said McVea.
According to the Bureau of Labor Statistics’ May Consumer Price Index report released on Tuesday, inflation has slowed for the 11th straight month. The year-over-year inflation rate has dropped from 4.9% to 4%. However, core inflation rose in May by 0.4% placing the rate at 5.3% year-over-year. So far in 2023, core inflation has risen by an average of 0.4% per month.
Driving the increases in May 2023 were the costs of shelter, food, and used vehicles.
“Overall, small business owners are expressing concerns for future business conditions,” NFIB Chief Economist Bill Dunkelberg said. “Supply chain disruptions and labor shortages will continue to limit the ability of many small firms to meet the demand for their products and services, while less severe than last years’ experience.”
Other major findings in the most recent NFIB small business report include:
- 44% of small business owners reported job openings that were hard to fill, down one point from April and remaining historically high.
- The net percent of owners raising average selling prices decreased one point to a net 32% (seasonally adjusted), still an inflationary level high but trending down.
- The net percent of owners who expect real sales to be higher deteriorated two points from April to a net negative 21%.
Small business owners’ inability to fill jobs continues to be a major concern across the board. Overall, 63% of owners reported hiring or trying to hire employees in May, which has increased since April. Of those, 89% reported few or unqualified applicants for the open positions.
Sarah Ulmer
