Inflation burrowing in deeper as No. 1 problem for many Main Street entrepreneurs
HELENA, Mont., Feb. 8, 2022—Today’s release of the latest bellwether measurement of the nation’s Main Street economy shows inflation rapidly muscling employee shortages and supply chain disruptions aside as a top worry of small-business owners.
The Small Business Economic Trends report (aka the Optimism Index), released monthly by the National Federation of Independent Business (NFIB), America’s largest small-business association, 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.
“Our Optimism Index is a national snapshot not broken down by state,” said Ronda Wiggers, Montana state director for NFIB. “While worries of inflation, supply chain disruptions, and in some cases, retail theft, seem evenly spread throughout the nation, states do have some differences and ours now is skewed more toward worker shortages, especially in the restaurant and hospitality industries. As the Economy at a Glance report for December, put out by Montana Department of Labor & Industry, ‘Long-term demographic shifts have reduced growth in the labor supply for over a decade, while short-term disruptions from the pandemic have temporarily reduced hours and availability for some worker groups.’ How we deal with that will be quite a policy accomplishment.”
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 Montana small business at www.nfib.com/MT.
For more than 77 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.
National Federation of Independent Business/Montana
491 South Park Ave.
Helena, MT 59601