Inflation Is Top Worry For Small Businesses in the U.S.

Inflation is the top problem for small businesses in the U.S., a survey by the National Federation of Independent Business showed Tuesday.

One quarter of small business owners said inflation is their biggest worry, followed by labor quality at 24 percent, the NFIB said Tuesday.

The group said its small business optimism index edged up to 89.4 in May from April’s score of 89. That’s below the long-term average of 98 but above the consensus forecast of 88.7.

“Overall, small business owners are expressing concerns for future business conditions,” said Bill Dunkelberg, NFIB Chief Economist. “Supply chain disruptions and labor shortages will continue to limit the ability of many small firms to meet the demand for their products and services, while less severe than last year’s experience.”

The share of owners expecting better business conditions over the next six months fell one point from April to a net negative 50 percent in May.

Forty-four percent of owners reported job openings that were hard to fill, down one point from April but remaining historically very high.

The net percent of owners raising average selling prices declined by one point to a net 32 percent. The NFIB described this as “still an inflationary level but trending down.”

The net percent of owners who expect real sales to be higher fell two points from April to a net negative 21 percent.

A net 41 percent of owners reported raising compensation, up one point from April. A net twenty-two percent said they plan to raise compensation in the next three months, up one point.  Ten percent of owners said labor costs are their top business problem.