- Small business owner optimism falls in October survey by the National Federation of Independent Business
- Labor challenges and inventory shortages continue to pressure businesses as they try to capitalize on economic growth
- Higher costs for materials, weaker sales blamed for lower profits
Summary by Dirk Langeveld
Small business owners continued to be less optimistic about current economic conditions in October, according to the Small Business Optimism Index from the National Federation of Independent Business. The index fell 0.9 points to 98.2, following a two-point drop in September.
“Small business owners are attempting to take advantage of current economic growth but remain pessimistic about business conditions in the near future,” said Bill Dunkelberg, chief economist at NFIB. “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.”
A net negative share of 37 percent said they expect better business conditions over the next six months. This share has plummeted 17 points in the past three months and is at its lowest level since November 2012.
- Of the 10 factors contributing to the index, only one (plans to make capital outlays) improved in October, with the other components falling or staying flat
- 56 percent of respondents said they made capital outlays in the past six months, with 40 percent of those spending on new equipment; 31 percent said they plan to make capital outlays in the next few months
- 57 percent reported higher average selling prices, while only 6 percent reported lower average selling prices
- A net negative 4 percent said they have seen higher nominal sales in the past three months, a drop of seven points from September
- A net negative 17 percent reported positive profit trends; among those reporting lower profits, the top reasons blamed for the trend included higher costs for materials 931 percent), weaker sales (25 percent), labor costs (9 percent) and the usual seasonal change (9 percent)
- 39 percent said supply chain disruptions have had a significant impact on their business, with 29 percent saying they have had a moderate impact and 21 percent saying the impact has been mild