Small business optimism rose in September, according to NFIB survey

The NFIB Small Business Optimism Index rose by 0.3 points in September to 91.5, while the group’s Uncertainty Index rose 11 points to 103.

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This is the 33rd consecutive month below the 50-year average of 98.

Among the key findings in the report:

• The net percent of owners reporting inventory gains fell four points to a net negative 13 percent.
• The average rate paid on short maturity loans was 10.1 percent, up 0.6 of a point from August.
• Thirty-four percent of all owners reported job openings they could not fill in the current period, down six points from August.
• A net 12 percent of owners reported paying a higher rate on their most recent loan, down three points from August.
• Fifty-one percent reported capital outlays in the last six months, down five points from August.
• A net 32 percent reported raising compensation, down one point from August.
• About 23 percent of owners reported that inflation was their single most important problem in operating their business, down one point from August but remaining the top issue.

“Small business owners are feeling more uncertain than ever,” NFIB Chief Economist Bill Dunkelberg said. “Uncertainty makes owners hesitant to invest in capital spending and inventory, especially as inflation and financing costs continue to put pressure on their bottom lines. Although some hope lies ahead in the holiday sales season, many Main Street owners are left questioning whether future business conditions will improve.”

Further, about 51 percent of owners reported capital outlays in the last six months, down five points from August. Of those making expenditures, 35 percent reported spending on new equipment, 23 percent bought vehicles, and 15 percent improved or expanded facilities. In addition, 10 percent spent money on new fixtures and furniture and 4 percent acquired new buildings or land for expansion. Also, 19 percent plan capital outlays in the next six months, down five points from August.

In addition, the net percentage of owners raising average selling prices rose two points from August to a net 22 percent seasonally adjusted. Price hikes were the most frequent in the finance, retail, transportation, and construction sectors. Seasonally adjusted, a net 25 percent plan price hikes in September.

Also, a net 32 percent reported raising compensation, down one point from August and remaining and the lowest reading since April 2021. A net 23 percent plan to raise compensation in the next three months, up three points from August.

About 9 percent of owners cited labor costs as their top business problem, unchanged from August, while 17 percent said that labor quality was their top business problem, remaining behind inflation as the number one issue.

Further, 2 percent of owners reported that all their borrowing needs were not satisfied, while 24 percent reported all credit needs met, and 62 percent said they were not interested in a loan. Additionally, 4 percent of owners reported that financing was their top business problem in September, unchanged from August.