Inflation racing ahead as No. 1 problem for many Main Street entrepreneurs
PHOENIX, Feb. 8, 2022—Move over worker shortages and supply chain disruptions. Inflation is bellying up to the bar as a top concern of small-business owners, according to today’s release of the latest Small Business Economic Trends report from NFIB, the nation’s leading small-business association.
Also known as the Optimism Index, the SBET is released monthly by the National Federation of Independent Business (NFIB), and this month’s found 22% of small-business owners reporting inflation as their single most important business problem, unchanged from December when it reached the highest level since 1981. The net percent of owners raising average selling prices increased four points to a net 61% (seasonally adjusted), the highest reading since the fourth quarter of 1974. The SBET is a national snapshot not broken down by state.
“The pains of inflation are felt by small businesses and consumers,” said Chad Heinrich, Arizona state director for NFIB. “Everyone in our economy feels it, and small businesses have limited choices when faced with higher prices. Faced with higher costs, they must choose between raising prices or cutting expenses. Unfortunately, that could mean job cuts during a time, against significant headwinds, when they are desperately trying to emerge strong from the pandemic.”
From NFIB Chief Economist Bill Dunkelberg
“More small business owners started the New Year raising prices in an attempt to pass on higher inventory, supplies, and labor costs. In addition to inflation issues, owners are also raising compensation at record high rates to attract qualified employees to their open positions.”
Key findings include:
- One of the Index components improved, seven declined, and two were unchanged.
- Owners expecting better business conditions over the next six months increased two points to a net negative 33%. Small business owners remain pessimistic about future economic conditions as this indicator has declined 13 points over the past six months.
- Forty-seven percent of owners reported job openings that could not be filled, a decrease of two points from December.
- Inventory accumulation plans fell five percentage points.
Keep up with the latest on Arizona small business news at www.nfib.com/arizona or by following NFIB on Twitter @NFIB_AZ
For 78 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.