SMALL BUSINESS ECONOMIC TRENDS

The NFIB Small Business Optimism Index decreased slightly in October by 0.9 points to 98.2. One of the 10 Index components improved, seven declined, and two were unchanged.

“Small business owners are attempting to take advantage of current economic growth but remain pessimistic about business conditions in the near future,” said NFIB Chief Economist Bill Dunkelberg. “One of the biggest problems for small businesses is the lack of workers for unfilled positions and inventory shortages, which will continue to be a problem during the holiday season.”

As reported in NFIB’s monthly jobs report, 49% of owners reported job openings that could not be filled, a decrease of two points from September. A net 44% of owners (seasonally adjusted) reported raising compensation, a 48-year record high reading. A net 32% plan to raise compensation in the next three months.

Fifty-six percent of owners reported capital outlays in the last six months, up three points from September. Of those making expenditures, 40% reported spending on new equipment, 24% acquired vehicles, and 14% improved or expanded facilities. Seven percent acquired new buildings or land for expansion and 12% spent money for new fixtures and furniture. Thirty-one percent of owners plan capital outlays in the next few months, up three points and two points above the 48-year average.

A net negative 4% of all owners reported higher nominal sales in the past three months, down seven points from September. The net percent of owners expecting higher real sales volumes decreased by two points to a net 0%.

The net percent of owners reporting inventory increases decreased three points to a net 0%. Thirty-nine percent of owners report that supply chain disruptions have had a significant impact on their business. Another 29% report a moderate impact and 21% report a mild impact. Only 10% of owners reported no impact from recent supply chain disruptions.

A net 9% of owners viewed current inventory stocks as “too low” in October, down one point from last month and near a record high level. A net 8% of owners plan inventory investment in the coming months.

The net percent of owners raising average selling prices increased seven points to a net 53% (seasonally adjusted). Six percent of owners reported lower average selling prices and 57% reported higher average prices. Price hikes were the most frequent in wholesale (78% higher, 4% lower), retail (72% higher, 4% lower), and construction (66% higher, 0% lower). A net 51% of owners (seasonally adjusted) plan price hikes.

The frequency of reports of positive profit trends decreased three points to a net negative 17%. Among owners reporting lower profits, 31% blamed the rise in the cost of materials, 25% blamed weaker sales, 9% cited labor costs, 9% cited the usual seasonal change, 6% cited lower prices, and 3% cited higher taxes or regulatory costs. For owners reporting higher profits, 56% credited sales volumes, 17% cited usual seasonal change, and 11% cited higher prices.

Two percent of small employers reported that all their borrowing needs were not satisfied. Twenty-three percent reported all credit needs met and 63% said they were not interested in a loan. A net 2% reported their last loan was harder to get than in previous attempts.

 

 

Tax Survey

NFIB’s Research Foundation randomly sampled 12,500 NFIB members between mid-November and mid-December, 2012 and asked them about a range of issues concerning the current federal tax code. Here’s how small business owners responded about how much taxes impact their ability to operate their businesses. Download the Study

Small Business Optimism

Small Business Optimism Decreases, Owners Uncertain About Future Business Conditions

October 2021

Small Business Optimism Index


Index Component Levels and Percentage Change from Prior Year


Index by Geographic Region

Index by Major Industry

Index by Employee Size-of-Business