Small business owners’ prospects for the future slumped to a 48-year low

Small business owners in America are experiencing their worst in fifty years, according to a survey released Tuesday morning.

The National Federation of Independent Businesses (NFIB) said its assessment of businesses hoping to improve business conditions over the next six months fell to the worst level in the survey’s 48-year history. The old historical maximum of this indicator was set in April.

Inflation remains a problem for small businesses, with 28% of business owners saying it’s their top business concern. That’s less than the 32 percent recorded in April, the highest since the fourth quarter of 1980.

“Inflation continues to outpace compensation, lowering real incomes nationwide,” said Bill Dunkelberg, NFIB chief economist. “Small business owners remained very pessimistic in the second half of the year as supply chain disruptions, inflation and labor shortages continued unabated.”

The net percentage of owners who raised the average selling price rose two percentage points to a net 72 percent, returning to the highest level in the 48-year history of the survey, last reached in March. This amount is 40 percent higher than in May of last year.

Consumer prices rose 8.6% in May, according to an index released by the Bureau of Labor Statistics last week. This is the highest inflation rate since 1981.

The NFIB said its Small Business Optimism Index fell one basis point to 93.1 in May. This is the fourth consecutive month that the index has remained below average.

Fifty-one percent of owners reported unfilled vacancies, up four percentage points from the April and March figures.

Instead of alleviating supply chain problems, it seems to be getting worse. 39% of company owners report supply chain disruptions have had a major impact on their business, up three percentage points from April. Another 31 percent report moderate side effects and 22 percent report low side effects. Just eight percent say recent supply chain disruptions have had no impact.

Collects data on small business economic trends through quarterly surveys from 4th^ika quarterly survey since 1973 and monthly since 1986. The respondents were randomly selected from NFIB members. The report is published on the second Tuesday of each month. The survey was conducted in May 2022.