Inflation continues to swipe at small business confidence

Small business confidence continues to slide as inflation remains the single most pressing issue.

In August, 27% of owners listed inflation as the most important issue facing their businesses—up two percentage points from July—according to the National Federation of Independent Business’ monthly Small Business Optimism Index. 

The net percentage of owners who had to raise their average selling prices increased two points to 27%, still at an inflationary level. 

As a result of inflationary concerns and other economic issues facing small businesses nationwide, the Small Business Optimism Index decreased 0.6 of a point in August to 91.3. This is the 20th consecutive month the index sat below the 49-year average of 98.

Other findings from the report: 

  • Small business owners expecting better business conditions over the next six months fell seven points from July to a net negative 37%. 
  • Forty percent of owners reported job openings that were hard to fill, down two points from July but remaining historically high.
  • The net percentage of owners who expect real sales to be higher decreased two points from July to a net negative 14%.
  • Fifty-six percent of businesses reported capital outlays in the last six months, up one point from July.

State-specific data was unavailable.

NFIB State Director Dawn McVea says small business owners are a “stubborn bunch.” 

“They’re determined to get through this, but it’s not easy. Inflation means they’re paying more for everything, and a labor shortage means they’re paying higher wages. When you put those things together, it can’t help but impact their customers,” she said in a prepared statement.

Read the full report.