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NFIB: Small Business Optimism Improves Despite Hiring Challenges

  • Small business optimism continues to improve in NFIB survey despite certain challenges
  • Labor quality remains a pressing issue as small business owners struggle to fill open positions
  • Business owners report improving earnings, but are also more uncertain about near-term business climate

Summary by Dirk Langeveld

Small business optimism has been improving steadily despite the challenges companies are facing in digging out from the lengthy disruption of the COVID-19 pandemic, according to a recent survey from the National Federation of Independent Business.

In its monthly Small Business Economic Trends, NFIB’s Small Business Optimism Index rose for the third month in a row. The reading was up from 95 in January to 99.8 in April.

Key findings in the report include:

  • Small business owners continue to struggle to fill open positions, with 44 percent saying they were unable to do so – a record high and twice the survey’s 48-year average of 22 percent
  • Twenty-four percent of respondents cited labor quality as their biggest problem
  • Fifty-one percent said they have raised wages or plan to do so in order to attract job candidates
  • More companies are passing on labor costs to the consumer, with 36 percent saying they’re raised their prices – up 10 points from March and the highest share in 40 years
  • A net negative share of 7 percent said their earnings have improved, although this reading has improved by 8 points in the past three months
  • Thirty-nine percent say weaker sales are to blame for lower earnings, while 16 percent cite seasonal changes
  • Twenty-seven percent said they plan to make capital expenditures in the next few months, up 7 points from March
  • A net negative share of 15 percent expect better business conditions in the next six months, down 7 points from March

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