The National Federation of Independent Business’ (NFIB) Small Business Optimism Index increased in July, but remained below its 48-year average, indicating the struggle facing the sector.
“The uncertainty in the small-business sector is climbing again as owners continue to manage historic inflation, labor shortages, and supply chain disruptions,” Bill Dunkelberg, NFIB’s chief economist, said in the release.
“As we move into the second half of 2022, owners will continue to manage their businesses into a very uncertain future.”
During this period, PPI for goods surged by 17.9 percent, the largest 12-month advance since November 2010. PPI for services rose by 7.7 percent, and for construction by 19.2 percent.
A net 37 percent of owners plan on raising prices of their products. The net percent of owners raising average prices declined by seven points, to 56 percent, in July on a seasonally adjusted basis.
Despite the fall, this is still expected to have an inflationary effect. Owners expecting real sales to be higher fell by one point, to a net negative 29 percent.
Labor WorriesAfter inflation, labor was cited as the top business problem, with 21 percent of owners seeing it as an issue. Nine percent of owners saw labor costs as a significant issue. Of the total respondents, a net 48 percent raised compensation and a net 25 percent plan on raising compensation in the coming three months.
More than 40 percent believed that hiring had become worse during the previous three months, with 87 percent finding it difficult to recruit qualified candidates.
This was the third consecutive decrease in job openings and the biggest fall since April 2020, according to data from the BLS.