Report: Small business optimism shrinks as year ends

The National Federation of Independent Business found that small business optimism is well below the 50-year average and decreasing. Reasons range from inflation to finding qualified help.

In a Tuesday news release, NFIB says its Small Business Optimism Index decreased 0.1 points in November to 90.6, "which marks the 23rd consecutive month below the 50-year average of 98."

The survey found that 22% of owners reported inflation was the single most important problem in operating their businesses, NFIB says. That is unchanged from October but 10 points lower than this time last year, the business lobbying group says.

"Job openings on Main Street remain elevated as the economy saw a strong third quarter," says Bill Dunkelberg, NFIB chief economist, in a statement. "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."

State-specific data was unavailable. But Bill Herrle, NFIB's executive director of its Florida chapter, says Florida "may be doing better than a lot of other states, but we're still not where we want to be."

"High prices continue to affect everything from the cost of running a business to where families travel on winter break, and many employers still have positions they can't fill," says Herrle.

Key findings of the national survey were:

• Owners expecting better business conditions over the next six months increased 1 point from October but was still a net negative of 42%.
• A net negative 17% of all owners reported higher nominal sales in the past three months, unchanged from October and the lowest reading since July 2020.
• Forty percent of owners reported job openings that were hard to fill, down 3 points. 

Overall, 54% reported hiring or trying to hire in November. Of those hiring or trying to hire, 93% of owners reported few or no qualified applicants for the positions they were trying to fill.