WASHINGTON, D.C. (Jan. 29, 2024) – NFIB Research Center Executive Director Holly Wade joined Yahoo! Finance to discuss small business optimism and the challenges facing Main Street businesses in 2024.
Wade shares data from NFIB’s December SBET survey as she highlights how inflationary pressures, the ongoing labor shortage, and increasing financing costs are impacting small businesses nationwide.
Watch Wade’s full interview here: https://finance.yahoo.com/video/inflation-continues-drain-small-business-205834175.html
“Small business owners are fairly pessimistic related to outlook on business conditions in the next six months and expansion opportunities. We’ve seen this environment for about the last year and a half, and as you mentioned, our index – for which we have been collecting this data for 50 years – has been under the 50-year average of 98 for about two years now, and has been at recessionary levels, especially over the last year with the challenging environment they are having to operate in with high inflation rates and, still, a tight labor market.”
“We’ve seen in our survey that the first hit on inflation pressures are business owners’ earnings…and then they pass along those costs to their customers…They’re also doing all of the things that you would expect internally in trying to increase productivity within their business [to absorb] those costs in other ways. But when it’s related to the increased cost of supplies and inventory, compensation costs – which are still a struggle for them [both] in retaining current employees and attracting applicants for those open positions – that we’re still seeing at very high levels, and then also, for some, that increase in financing costs has become quite troublesome for them in absorbing those costs and figuring out a way to remain competitive, and passing along those costs to their customers.”
“We are still seeing historically high levels of job openings in the small business sector. They are trying to hire and fill those positions where they’re able to have applicants that meet those minimum qualifications…So, it’s frustrating for a lot of owners who have had trouble since the beginning of the pandemic in filling those positions. This has been one of their main challenges. Still, one in five small business owners are saying that the number one problem facing their business is the labor market.”