by J.D. Davidson
Small business optimism fell to its lowest point in nearly 50 years, and Ohio small business owners remain cautious about growth, according to the monthly National Federation of Independent Business Optimism Index.
The index fell 0.1 points in May to 93.1, making it the fifth consecutive month below the organization’s 48-year average of 98. At the same time, the nationwide survey showed the percentage of owners expecting business conditions to improve over the next six months fell 4 points to 54%. That also represented the lowest mark in 48 years.
“Inflation continues to outpace compensation which has reduced real incomes across the nation,” said NFIB Chief Economist Bill Dunkelberg. “Small business owners remain very pessimistic about the second half of the year as supply chain disruptions, inflation, and the labor shortage are not easing.”
The national survey followed a study of Ohio small business owners released last week that showed nearly all are concerned with inflation, labor shortages and supply chain disruptions.
That survey showed 99% have serious concerns with those issues, with nearly half (49%) now more worried about growing inflation than any other problem. Ongoing labor issues ranked as the second largest concern at 35%, while 15% ranked supply chain problems as their top concern.
In terms of raising prices, 88% of Ohio members of NFIB have had to raise them, with a quarter hiking prices by more than 15%.
“Our members here in Ohio are filled with uncertainty as surging inflation, especially in fuel costs, rising labor costs and supply chain issues that continue to linger,” said Chris Ferruso, Legislative Director for NFIB in Ohio. “In contending with larger competitors, it is more difficult for small businesses to raise their prices which would price themselves out of the market. It is not hard to see why so many are hesitant to grow. There is just too much uncertainty.”
The nationwide survey also showed:
- 51% percent of owners reported job openings that could not be filled, up 4 points from April.
- The net percent of owners who expect real sales to be higher decreased 3 points from April to a net negative 15%.
- A net 46% (seasonally adjusted) of owners reported raising pay, down 3 points from April with a net 25% planning to raise pay in the next three months, down 2 points from April but historically high.
- 39% of owners report that supply chain disruptions have had a significant impact on their business, up 3 points. Another 31% report a moderate impact and 22% report a mild impact. Only 8% of owners report no impact from the recent supply chain disruptions.
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An Ohio native, J.D. Davidson is a veteran journalist with more than 30 years of experience in newspapers in Ohio, Georgia, Alabama and Texas. He has served as a reporter, editor, managing editor and publisher. Davidson is a regional editor for The Center Square.