JEFFERSON CITY — The NFIB Small Business Optimism Index decreased one point in September to 99.1. Three of the 10 Index components improved, five declined, and two were unchanged.
“Small business owners are doing their best to meet the needs of customers, but are unable to hire workers or receive the needed supplies and inventories,” said NFIB Chief Economist Bill Dunkelberg. “The outlook for economic policy is not encouraging to owners, as lawmakers shift to talks about tax increases and additional regulations.”
State-specific data isn’t available, but NFIB State Director Brad Jones said, “Problems with the supply chain on top of Missouri’s labor shortage are making it hard for small businesses to provide the goods and services people need.”
Key findings include:
The NFIB Uncertainty Index increased five points to 74.
Owners expecting better business conditions over the next six months decreased five points to a net negative 33 percent.
Fifty-one percent of owners reported job openings that could not be filled, a 48-year record high for the third consecutive month.
A net 42 percent of owners reported raising compensation, a 48-year record high.
As reported in NFIB’s monthly jobs report, a record 51 percent of small business owners (seasonally adjusted) reported job openings they could not fill in the current period, up one point from August. A net 42 percent of owners (seasonally adjusted) reported raising compensation, up one point from August and a 48-year record high reading.
A net 30 percent of owners plan to raise compensation in the next three months, up four points from August’s record high reading. Twelve percent of owners cited labor costs as their top business problem and 28 percent said that labor quality was their top business problem – both record-high readings.
Fifty-three percent of owners reported capital outlays in the next six months, down two points from August and historically a weak reading. Of those making expenditures, 37 percent reported spending on new equipment, 21 percent acquired vehicles, and 12 percent improved or expanded facilities. Six percent of owners acquired new buildings or land for expansion and 10 percent of owners spent money for new fixtures and furniture. Twenty-eight percent plan capital outlays in the next few months, down two points from August and one point below the 48-year average.
Seasonally adjusted, three percent of owners reported higher nominal sales in the past three months, up three points from August. The net percent of owners expecting higher real sales volumes improved by four points to a net two percent.
The net percent of owners reporting inventory increases rose five points to a net three percent, back into positive territory after two months of owners reporting more declines than gains. This is the highest reading since the pandemic started.
Over 35 percent of owners report supply chain disruptions have had a significant impact on their business. Another 32 percent report a moderate impact and 21 percent report a mild impact. Only 10 percent of owners report no impact from recent supply chain disruptions. A net 10 percent of owners viewed current inventory stocks as “too low” in September, down one point from August. A net nine percent of owners plan inventory investment in the coming months, down two points from August but historically a very elevated reading.
The net percent of owners raising average selling prices decreased three points to a net 46 percent (seasonally adjusted). Unadjusted, eight percent of owners reported lower average selling prices and 53 percent reported higher average prices. Price hikes were the most frequent in wholesale (75 percent higher, zero percent lower), manufacturing (67 percent higher, four percent lower), and retail (71 percent higher, two percent lower). Seasonally adjusted, a net 46 percent of owners plan price hikes.
The frequency of positive profit trends increased one point to a net negative 14 percent. Among the owners reporting lower profits, 26 percent blamed the rise in the cost of materials, 23 percent blamed weaker sales, 19 percent cited labor costs, 10 percent cited the usual season change, six percent cited lower prices, and six percent cited higher taxes or regulatory costs. For those owners reporting higher profits, 57 percent credited sales volumes, 19 percent cited usual seasonal change, and five percent cited higher prices.
Two percent of owners reported that all their borrowing needs were not satisfied. Twenty percent reported all credit needs were met and 62 percent said they were not interested in a loan. A net four percent of owners reported their last loan was harder to get than in previous attempts. Zero percent reported that financing was their top business problem. A net zero percent of owners reported paying a higher rate on their most recent loan.
The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the 4th quarter of 1973 and monthly surveys since 1986. Survey respondents are drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in September 2021.
About NFIB
For more than 75 years, the National Federation of Independent Business has been the voice of small business, advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit www.NFIB.com.