The latest NFIB Small Business Optimism Index increased by just shy of a point in July to 91.9, though it is the 19th consecutive month below the 49-year index average of 98. Worries about inflation have cooled slightly, down three points from the June survey but still the top concern of 21 percent of respondents.
“Georgia’s economy is still robust, but inflation is definitely taking its toll on small businesses. It’s driving up the cost of doing business and making it difficult for owners to plan ahead,” said Georgia’s NFIB State Director Hunter Loggins.
The number of owners expecting better business conditions in the next six months is up 10 points from June but it is still historically low at a net negative of 30 percent. Though that is up from a whopping 61 percent negative in June of last year. As has been the case for a number of years, nearly half of owners report job openings that are hard to fill. In the recent job report – a separate but related survey – more than 60 percent of owners reported hiring or trying to hire in July and of those, more than 90 percent reported having few or no qualified applicants for the positions.
Additionally, though inflation has eased quite a bit from its high last year, 25 percent of owners report raising sale prices – the lowest for this number since January of 2021. Optimism for sales continues to improve but continues to be a negative at 12 percent. These views on sales impact a key statistic for Georgia’s logistics industry – inventory.
Increases in inventory are a key part of business for Georgia’s ports. Only 14 percent of owners reported increases in inventory, but even that is offset by another 14 percent reporting reductions. The survey did measure specific industries as well, and those numbers show some possible improvement for the economy. By industry, shortages are reported most frequently in retail (15%), transportation (14%), manufacturing (11%), and services (9%). Shortages in construction (6%) have been reduced. A net negative 2% of owners plan inventory investment in the coming months, up one point.
“With small business owners’ views about future sales growth and business conditions dismal, owners want to hire and make money now from solid consumer spending,” said NFIB Chief Economist Bill Dunkelberg. “Inflation has eased slightly on Main Street, but difficulty hiring remains a top business concern.”
One other piece of data that is changing and important this year involves the changing interest rates. Only three percent of owners reported borrowing needs that are not satisfied. Twenty-five percent reported all credit needs are met and another 62 percent reported they were not interested in a loan. This could mean a couple things, interest rates are not impacting borrowing or lending needs, or, alternatively, business owners are not needing to take out new loans – based on all of the above.
