Optimism Falls Among U.S. Small Businesses

The number of small businesses expecting better conditions has declined, according to a September survey by the National Federation of Independent Business. 

Released Oct. 12, the NFIB survey found that small businesses have growing concerns with supply chain issues and mounting pressure to pay workers higher wages. 

“Small business owners are doing their best to meet the needs of customers, but are unable to hire workers or receive the needed supplies and inventories,” explained NFIB chief economist Bill Dunkelberg.

More than 500 small businesses participated in the monthly survey.

About 35% of survey respondents said supply chain disruptions had impacted their business significantly, with another 32% reporting a moderate impact. 

The Biden administration last week announced plans to open California ports 24/7 work to relieve bottlenecks ahead of the holiday rush.

Labor Shortage 

The end of summer also continued to be challenging for businesses looking to hire. 

A three-month continuous record high of 51% of businesses who participated in the survey said they are struggling to fill open jobs.

The trend raises questions as new unemployment claims hold steady.  

Meanwhile, a net 42% of small businesses reported they increased wages for in the last month. The trend is expected to continue.

A net 30% said they plan to raise compensation in the coming three months. 

A majority of businesses reported that increasing wages and labor quality are among their top struggles. 

There are some positive profit trends, however.

Small businesses that reported higher profits month-to-month cite strong sales volumes and seasonal changes as key factors.