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Small Business Optimism Ticks Up Slightly in November NFIB Report

  • NFIB Small Business Optimism Index increases 0.2 points in November
  • Report shows some improvement on sales and credit conditions, but pessimism persists on economic conditions
  • A record share of small business owners are planning to hike their prices

Summary by Dirk Langeveld

Small business owners were slightly more optimistic in November despite more uncertainty on a variety of economic issues, according to the  National Federation of Independent Business.

NFIB’s Small Business Optimism Index rose 0.2 points in November to 98.4, with some improvement to expected real sales and credit conditions. However, a net negative share of 38 percent expect economic conditions to improve in the next six months, down one point to tie a record low in the 48-year survey. This reading has plummeted 18 points in the past four months.

“As the end of the year nears, the outlook for business conditions is not encouraging to small business owners as lawmakers propose additional mandates and tax increases,” said Bill Dunkelberg, chief economist at NFIB. “Owners are also pessimistic as many continue managing challenges like rampant inflation and supply chain disruptions that are impacting their businesses right now.”

  • A net share of 59 percent said they are raising their sales prices, up six points from October and the highest share since October 1979
  • A net 54 percent are planning price hikes, up three points to reach a record high
  • 48 percent reported unfilled job openings, down one point from October; 60 percent said they were trying to hire
  • A net 44 percent said they were raising their compensation, unchanged from October but matching a record high; a net share of 32 percent plan to raise compensation in the next three months, also unchanged and a record high
  • 55 percent said they made capital outlays in the past six months, a decrease of one point; investments were concentrated on new equipment (39 percent), vehicles (22 percent), and improving or expanding facilities (14 percent)
  • 27 percent said they were planning capital outlays in the next six months, a drop of four points
  • A net share of negative 2 percent reported higher nominal sales in the past three months, an increase of two points
  • 35 percent said supply chain disruptions were having a significant impact on their business, while 31 percent said the impact was moderate and 22 percent said it was mild
  • A net negative share of 17 percent reported positive profit trends, unchanged from the previous month
  • Small business owners were most likely to blame higher materials costs (32 percent), weaker sales (25 percent), and lower sales (16 percent) for lower profits; those reporting higher profits were most likely to credit sales volumes (61 percent), higher prices (17 percent), and the usual seasonal change (11 percent)

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