Over 50 percent are significantly impacted by supply chain disruptions and another 24% by significant staffing shortages
In a survey of small business owners published this week by the NFIB Research Center, inflation pressures, supply chain disruptions and staffing shortages continue to challenge small businesses as they attempt to recover from the COVID-19 pandemic.
“The small business recovery continues to be held back due to soaring inflation, ongoing supply chain disruptions, and staffing shortages,” said Holly Wade, Executive Director of NFIB’s Research Center. “Most small business owners have raised their prices to adjust to the numerous challenges they are facing.”
The survey was conducted from March 10-11 and is the 22nd survey NFIB has conducted of the effects of the COVID-19 pandemic on small business owners. Key findings from the survey include:
- About three-quarters (73%) of small business owners have increased their average selling prices. Of those who raised prices, 44% raised prices by 10% or more and another 30% by between 5% and 9.9%. The most common causes for price spikes were supply chain disruptions and increased compensation as a result of staffing shortages.
- Over half of all owners (51%) reported that supply chain disruptions have significantly impacted their business, while only 5% said that supply chain disruptions hadn’t affected their business at all. Eighty percent of affected owners reported that the disruption is causing lost sales opportunities to some degree.
- Forty-five percent of those affected report that the supply chain disruptions are worsening. The vast majority (89%) of owners anticipate supply chain disruptions will continue through the next five months of 2022.
- Twenty-four percent of owners are experiencing a severe staffing shortage, and another 18% a moderate shortage.
- Of the affected owners, 45% reported a moderate-to-severe loss of sales opportunities as a result of staffing shortages. This figure was higher in past months, but more and more owners have successfully adjusted operations to accommodate demand.
- To counter the staffing shortage, most (85%) of small employers reported that they increased wages. Smaller numbers offered better benefits such as paid time off (28%), hiring bonuses (22%), referral bonuses (18%), or enhanced health insurance benefits (27%).
- Almost all (91%) of owners are working longer hours to compensate for the labor shortage, with 62% offering overtime and 43% expanding hours offered to part-timers. In more drastic measures, 39% have adjusted business hours, 36% have introduced new technologies, and 37% have reduced the variety of goods and services sold.
- About a third (32%) of small businesses report that their sales numbers are 75%-99% of that before the pandemic. Thirty-five percent have returned or exceeded normal sales numbers.
- About a quarter of all owners (24%) report that economic conditions have returned to normal in their area. About half of all owners (48%) expect that conditions will not improve until 2023 or beyond.
- Twelve percent of small business owners say that the recent spike in COVID-19 cases had a large impact on their business, with another 19% saying that it had a moderate impact and 36% reported a mild impact.
Since March 2020, NFIB has conducted a series of Small Business COVID-19 surveys assessing the health crisis’ impact on small business operations, economic conditions, and utilization of the targeted small business loan programs. Read the complete 22nd edition survey results here.
The full series of NFIB COVID-19 surveys can be found here.