NFIB: Small business optimism rises, but 50% of owners still have vacancies they can’t fill

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The NFIB’s Small Business Optimism Index rose in August to 100.1, up 0.4 points from July. Five of the 10 index components improved, four declined and one remained unchanged. The NFIB Uncertainty Index fell seven points to 69, the lowest level since January 2016.

“As the economy enters the fourth quarter, small business owners are losing confidence in the strength of future business conditions,” said Bill Dunkelberg, NFIB Chief Economist. “The biggest problem small employers face today is finding enough workers to meet their demand and, for many, dealing with supply chain disruptions. ”

The main findings include:

– Homeowners expecting better trading conditions over the next six months fell eight points to a net negative of 28%. This indicator has lost 16 points in the last two months to reach its lowest level since January 2013.

– Fifty percent of owners reported vacancies that could not be filled, a one point increase from July and a record 48 years for the second month in a row.

Graph 1

As noted in the NFIB’s Monthly Employment Report, 50% of owners reported vacancies they were unable to fill during the current period, up one point from to July and a record for the second consecutive month. The number of vacancies remains well above the historical 48-year average of 22%.

Fifty-five percent of homeowners reported capital expenditures in the past six months, unchanged from July and historically low. Among the spending companies, 41% reported spending on new equipment, 22% on vehicles acquired, and 16% on facilities improved or expanded. Six percent of homeowners bought new buildings or land to expand and 12% spent money on new appliances and furniture.

Thirty percent of homeowners expect capital spending in the next few months, up four points from July but still quite low historically.

A net zero percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down five points from July. The net percentage of owners expecting higher actual sales volumes improved by two points to a net negative of 2%.

The net percentage of owners reporting inventory increases increased four points to a net negative of 2%. Over 37% of owners say supply chain disruptions have had a significant impact on their business, 29% report a moderate impact, and 21% report a slight impact. Only 13% report no impact from recent supply chain disruptions.

A net 11% of owners consider current inventories “too low” in August, down one point from the July record. A net 11% of owners plan to invest in inventory in the coming months, up five points from July.

The net percentage of owners raising average selling prices increased three points to 49% net (seasonally adjusted). Unadjusted, 4% reported lower average selling prices and 52% reported higher average prices. Price increases were most common in wholesale trade (68% higher, 0% lower), manufacturing (60% higher, 2% lower) and retail (52% higher, 4% lower). Adjusted for seasonal variations, a net 44% of owners expect price increases.

A net 41% (seasonally adjusted) signaled an increase in compensation, up three points from July and a record 48 years. A 26% net plan to increase compensation over the next three months, down one point from the July record. Ten percent of owners cited labor costs as their top business issue and 28% said labor quality was their top business issue, up two points from July and both are record readings.

The frequency of positive earnings trend reports decreased by two points to a net negative of 15%. Among homeowners reporting declining profit trends, 34% blamed rising material costs, 27% blamed weaker sales, 9% cited labor costs, 9% cited the usual seasonal change, 8% cited lower prices and 3% cited higher taxes. or regulatory costs. For owners reporting higher profits, 60% credited sales volumes, 20% cited usual seasonal changes, and 10% cited higher prices.

Two percent of homeowners said not all of their borrowing needs were met, 22% said all of their credit needs were met, and 63% said they were not interested in a loan. A net 3% said his latest loan was harder to get than on previous attempts. Only 1% of homeowners said financing was their main business problem. A net 2% of homeowners said they were paying a higher rate on their most recent loan, up one point from July.

The NFIB Research Foundation has collected data on small business economic trends with quarterly surveys since the 4th quarter of 1973 and monthly surveys since 1986. Survey respondents are from members of the NFIB. The report is published on the second Tuesday of each month. This survey was carried out in August 2021.


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