Report: Small business owners' uncertainty highest since pandemic

Uncertainty is on the rise in the business community, with inflation and labor quality among the top concerns of owners, according to a new report from the National Federation of Independent Business. It issues monthly findings based on surveys of small business owners.

The Uncertainty Index in August rose to its highest level since October 2020, according to the NFIB. It was at 92, up 2 points from July; up 10 points from June; and 19 points above the January reading. Uncertainty is gauged by how business owners respond to questions about the future, for example, whether they plan to hire in the next three months.

“With the Uncertainty Index reaching the highest level since 2020, there is no doubt that small businesses need relief,” NFIB Florida Executive Director Bill Herrle says in a statement.

Among small business owners, 24% say inflation is their top operating issue, down one point from July, according to the NFIB.

Next on the list of top business problems was labor quality, with 21% reporting this as their biggest issue, NFIB says. In fact, a seasonally adjusted 40% of small business owners reported having job openings they could not fill, up two points from July. Of the 62% of owners hiring in August, 90% say they had few or no qualified applicants for positions they were trying to fill, according to the NFIB.

The frequency of reports of positive profit trends was a net negative 37%, according to NFIB, which says that was seven points worse than July and the lowest since March 2010.

Seasonally adjusted, a net 25% of business owners say they plan price hikes. They are most frequent in the finance, retail, construction and manufacturing sectors, according to the NFIB.

“The mood on Main Street worsened in August,” NFIB Chief Economist Bill Dunkelberg says in the statement. “Historically high inflation remains the top issue for owners as sales expectations plummet and cost pressures increase. Uncertainty among small business owners continues to rise as expectations for future business conditions worsen.”