The National Federation of Independent Business (NFIB) released its Small Business Optimism Index this week, which gauges business conditions for small businesses.
The index decreased 0.1 point in November to 90.6. This marks the 23rd consecutive month that the index has come in below the 50-year average of 98. Roughly 22 percent of business owners surveyed said inflation was their single most important problem in operating their business. That is unchanged from October but 10 points lower than this time last year.
“Job openings on Main Street remain elevated as the economy saw a strong third quarter,” NFIB Chief Economist Bill Dunkelberg said. “However, even with the growing economy, small business owners have not seen a strong wave of workers to fill their open positions. Inflation also continues to be an issue among small businesses.”
Among the key findings in the November report, the index found that owners expecting better business conditions over the next six months increased one point from October to 42 percent.
Also, 17 percent of all owners reported higher nominal sales in the past three months, unchanged from October. This is the lowest reading since July 2020.
In addition, 40 percent of owners said job openings were hard to fill, down three points, while 30 percent of owners plan to raise compensation in the next three months, up six points from October. This is the highest since December 2021.
Further, 61 percent of owners reported capital outlays in the last six months, up four points from October. Of those making expenditures, 41 percent reported spending on new equipment, 23 percent acquired vehicles, 17 percent improved or expanded facilities, 11 percent spent money on new fixtures and furniture, and 6 percent acquired new buildings or land for expansion. Also, 23 percent plan capital outlays in the next few months.
Additionally, 17 percent of all owners reported higher nominal sales in the past three months, remaining the lowest reading since July 2020.
The percentage of owners raising average selling prices decreased five points from October to a net 25 percent. Meanwhile, 22 percent of owners reported that inflation was their single most important problem in operating their business, unchanged from last month.
The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973. Survey respondents are randomly drawn from NFIB’s membership.