InsiderAdvantage has covered recent news of supply chain struggles – ships backed up across the Atlantic waiting to unload in Savannah and Congress getting involved as the problem continues. It looks like some of that news may be having an impact down the line. Possible inflation concerns and hiring difficulty are also making some business owners nervous.
The new National Federation of Independent Business (NFIB) released its latest Small Business Optimism Index on Tuesday and things have slipped a bit, down one point from last month. Not such a huge shift but of the 10 index components, five declined, with only two unchanged and three improving. Perhaps the most grim detail from the report is that owners expecting better business conditions over the next six months is down to only 33 percent. More than 50 percent of owners reported having open positions they have been unable to fill – a 48-year record high for the third month in a row.
“Small business owners are doing their best to meet the needs of customers, but are unable to hire workers or receive the needed supplies and inventories,” said NFIB Chief Economist Bill Dunkelberg. “The outlook for economic policy is not encouraging to owners, as lawmakers shift to talks about tax increases and additional regulations.”
The related Uncertainty Index increased up to 74 points. Some good news on the economic front for workers is more than 40 percent of business owners reported they would be raising compensation, coincidentally another 48-year record high. Unfortunately, another 40 percent reported that labor issues were their top business problem – 12 percent citing labor costs and 28 percent citing labor quality.
Regarding those supply chain issues, 35 percent of owners said that supply chain disruptions have had a “significant impact” on their business. Another 50 percent report the disruptions as having moderate or mild impacts – only 10 percent reported no impact.
NFIB Georgia Director Nathan Humphrey said, “Supply-chain disruptions and difficulties hiring qualified workers are making it hard for Georgia’s small businesses to get back to where they were before the pandemic began a year and a half ago.”
Interestingly, on the inflation front, the percent of owners raising average selling prices decreased three points to 46%. Still not good but the number is moving in the right direction for consumers. Though that is likely a poor argument as overall prices have gone up for 75 percent of wholesale businesses (0% lower), 67 percent higher in manufacturing (4% lower) and 71 percent higher in retail (2% lower). Even seasonally adjusted, nearly half of business owners are planning prices increases.
That all adds up to a lot of businesses. It seems like talk about inflation may not being going anywhere anytime soon.
