Small business optimism rises several inches » CBIA

Optimism is growing among small business owners, but they are still far below average based on national survey results.

The National Federation of Independent Businesses’ Small Business Optimism Index, released on October 11, rose 0.3 points to 92.1 in September.

September marked the third straight monthly increase from June’s low of 89.5. However, it also marked the ninth consecutive month below the nearly half-century average of 98.

NFIB Chief Economist Bill Dunkelberg said: “Inflation and labor shortages remain the most difficult challenges facing small business owners.

“Even with these challenges, owners are looking for opportunities to grow their businesses in the current period.”

CBIA President and CEO Chris DiPentima said the report “shows that small businesses are doing what they can to rise to the critical challenges facing them.” .

“It also shows that there is work to be done to implement solutions that transform the economy and provide opportunity for all,” he said.

inflation

Thirty percent of SMEs surveyed report that inflation is the single most important issue.

The US CPI rose 0.4% in September, according to the US Bureau of Labor Statistics. Inflation is up 8.2% on a 12-month basis, but is down from its 9% peak in June.

A net 51% of small businesses increased their average selling price. This is a 2 point decrease, the lowest level in a year.

Nearly a third (31%) of business owners plan to raise prices in the next three months, the lowest percentage since January 2021.

Price increases were most frequent in the retail, construction, transportation and wholesale sectors.

Other findings

• A net minus 44% of small business owners expect business conditions to improve over the next six months. Down 2 points from August.

• A net negative 10% of owners expect actual sales to increase by 9 percentage points from August.

• Of those who reported lower profits, 42% cited higher material costs as the reason, 21% cited lower sales, and 12% cited labor costs.

• 56% of owners reported capital expenditure in the last 6 months. This is a 4 point increase from August.

• 32% of owners report that supply chain disruptions have had a significant impact on their business. 34% reported moderate impact and 22% reported mild impact. Only 10% of owners reported being unaffected by recent supply chain disruptions.

labor shortage

After inflation, labor issues were one of the most important challenges for small business owners.

46% report difficulty filling vacancies, despite a 3 percentage point drop from August.

23% of seasonally adjusted net owners plan to create a new job within the next three months. Of these owners, 89% reported few or no eligible applicants.

The labor shortage is acutely felt in Connecticut. The 2022 Connecticut Business Survey found that 85% of Connecticut employers are having trouble finding and retaining workers, and 39% said the lack of skilled applicants is their biggest obstacle to growth. says.

“Because of challenges such as inflation and labor shortages, the CBIA is asking elected candidates for public office to endorse policy recommendations on transforming Connecticut,” said Dipentima.

“The policy solution is specifically designed to address the factors driving labor shortages and rising costs of living and doing business in Connecticut.

The CBIA asks candidates for elected office to uphold our pledge to support changes that will make our state’s economy stronger, more vibrant, and more equitable for all. increase. ”