Small business owners are pessimistic about the future of the economy, according to a new poll.
The National Federation of Independent Businesses released the polling data Tuesday, which shows that the group’s “Small Businesses Optimism Index” decreased slightly in November to 90.1, its 23rd straight month below the historical average of small business optimism.
“Owners expecting better business conditions over the next six months increased one point from October to a net negative 42% seasonally adjusted,” NFIB said. “A net negative 17% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, unchanged from October and the lowest reading since July 2020.”
Notably, 20% of small businesses cite inflation as the biggest problem facing their business. Inflation has soared in recent years, making a range of goods and services more expensive for small businesses.
Filling job openings has remained a struggle as well. The survey found that 40% of small businesses reported difficulty filling job openings.
“Job openings on Main Street remain elevated as the economy saw a strong third quarter,”sai NFIB Chief Economist Bill Dunkelberg. “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.”
Meanwhile, economic analysis of the outlook overall backs some of the concerns of small business owners. A recent economic analysis from The Conference Board projects high inflation, high interest rates and “very short” recession.
“We forecast that real GDP will expand by just 0.8 percent in 2024,” Justyna Zabinska-LaMonica from The Conference Board, said in a statement.
This data comes after a different survey from Alignable, a network of thousands of small businesses, released last month showed small businesses have noted a drop in consumer spending this holiday season, a time when many businesses make the lion’s share of their profits.
“In fact, the percentage of shop owners noting consumer spending declines skyrocketed from October to November — up 10 percentage points — as 49% of retailers reported reduced spending vs. just 39% last month,” Casto said. “That’s the steepest jump in at least six months.”
