Biggest uncertainty for small businesses since pandemic

Uncertainty is on the rise in the business sector, with inflation and labor quality among owners’ top concerns, according to a recent National Federation of Independent Businesses research. It publishes monthly findings based on polls of small business owners.

The Uncertainty Index increased in August to its highest level since October 2020. It was at 92, up 2 points from July, 10 points from June, and 19 points higher than the January reading. According to a recent article by Elizabeth King of Business Observer, the business owners’ responses to questions about the future, such as whether they intend to hire within the next three months, are a good indicator of their level of uncertainty.

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

According to the NFIB, 24% of small business owners say inflation is their top operating challenge, a one-point decrease from July.

Additionally, labor quality was next on the list of top company challenges, with 21% citing it as their most pressing issue. In fact, a seasonally adjusted 40% of small business owners reported job openings that could not be filled, a two-point increase from July. According to the NFIB, 90% of the 62% of owners who hired in August reported having few or no qualified applicants for the positions they were trying to fill.

According to the NFIB, there were a net negative 37% of reports of rising profit trends. This was the lowest since March 2010 and seven points worse than July.

Seasonally adjusted, a net 25% of business owners expect pricing increases. They are most common in the finance, retail, construction, and manufacturing industries.

“The mood on Main Street worsened in August,” NFIB Chief Economist Bull Dunkelberg says in a statement. “Historically high inflation is the most pressing issue for owners, as sales forecasts fall and cost pressures rise. Uncertainty among small business owners is increasing as prospects for future business conditions worsen.

This article originally appeared on Business Observer