Report Shows More Small Business Owners are Pessimistic About Future Conditions

October 17, 2023 Last Edit: March 19, 2026

Inflation and labor quality remain top concerns as small businesses see an increase in unfilled jobs.

Report Shows More Small Business Owners are Pessimistic About Future Conditions

In the September Small Business Economic Trends report, the NFIB Small Business Optimism Index decreased by half of a point in September to 90.8. September’s reading marks the 21st consecutive month below the 49-year average of 98. Twenty-three percent of owners reported that inflation was their single most important problem in operating their business, unchanged from last month and tied with labor quality as the top concern. “Owners remain pessimistic about future business conditions, which has contributed to the low optimism they have regarding the economy,” said Bill Dunkelberg, NFIB Chief Economist. “Sales growth among small businesses have slowed and the bottom line is being squeezed, leaving owners few options beyond raising selling prices for financial relief.” Key findings include:

Small business owners expecting better business conditions over the next six months deteriorated six points from August to a net negative 43% seasonally adjusted; however, this is 18 percentage points better than last June’s reading of a net negative 61% and definitely is at recession levels.
Forty-three percent (seasonally adjusted) of owners reported job openings that were hard to fill, up three points from August and remaining historically high as owners can’t hire enough workers due to few qualified applicants.
Seasonally adjusted, a net 36% of owners reported raising compensation.
The net percentage of owners raising average selling prices increased two points to a net 29% seasonally adjusted, still a very inflationary level.

According to NFIB’s jobs report, 43% (seasonally adjusted) of all small business owners reported job openings they could not fill in the current period, up three points from August. Owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 18% planning to create new jobs in the next three months. “Small business owners have spent the first three quarters of 2023 working to recruit and retain qualified employees for their businesses, but it still remains a top challenge,” said Bill Dunkelberg, NFIB Chief Economist. “Owners continue to raise compensation to attract the right employees.” Overall, 61% of owners reported hiring or trying to hire in September, up two points from August. Of those hiring or trying to hire, 93% of owners reported few or no qualified applicants for the positions they were trying to fill. Thirty percent of owners reported few qualified applicants for their open positions, and 27% reported none. Fifty-seven percent of owners reported capital outlays in the last six months. Of those making expenditures, 41% reported spending on new equipment, 22% acquired vehicles, and 17% improved or expanded facilities. Twelve percent of owners spent money on new fixtures and furniture and 7% acquired new buildings or land for expansion. Twenty-four percent of owners plan capital outlays in the next few months. A net negative 8% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up six points from August’s lowest reading since August 2020. The net percentage of owners expecting higher real sales volumes improved one point to a net negative 13%. The net percentage of owners reporting inventory gains improved four points to a net negative 3%. Not seasonally adjusted, 13% reported increases in stocks, and 15% reported reductions. The net percentage of owners raising average selling prices increased two points from August to a net 29% seasonally adjusted. Twenty-three percent of owners reported that inflation was their single most important problem in operating their business, unchanged from last month and tied with labor quality as the top problem. Unadjusted, 13% of owners reported lower average selling prices, and 41% reported higher average prices. Price hikes were the most frequent in finance due to rising interest rates (75% higher, 3% lower), construction (53% higher, 6% lower), retail (49% higher, 11% lower), services (33% higher, 12% lower), and wholesale (33% higher, 10% lower). Seasonally adjusted, a net 30% plan price hikes. Seasonally adjusted, a net 36% reported raising compensation in September. A seasonally adjusted net 23% plan to raise compensation in the next three months, down three points from August. The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in September 2023. The full Small Business Economic Trends report for September is now available. The entire NFIB Jobs Report is available for further analysis.

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