Small business optimism ends 2022 near lowest level since 2013 as inflation bites

Optimism among small business owners retreated in December to near their lowest levels since 2013 as inflation and the hiring outlook worsened in the last month of the year.

The National Federation of Independent Business’ (NFIB) optimism index fell to 89.8 last month from 91.9 in November, the group said in a report on Tuesday. Eight out of the ten components of the index fell in December.

Only June 2022’s reading of 89.5 kept Tuesday’s report from registering a 10-year low.

“Overall, small business owners are not optimistic about 2023 because sales and business conditions are expected to worsen,” NFIB chief economist Bill Dunkelberg said in the report.

Inflation remains the single most important issue affecting small businesses, with 32% of business owners identifying it as the biggest problem facing their company.

Also Read :  China Lacks the Right Workers to Boost Xi’s Favored Tech Jobs

Small businesses have passed some of those costs on to customers, but it appears that impulse may be waning. The net share of owners increasing the average selling price declined to 43%, the lowest level since May 2021, while 24% owners are planning a price increase, down from November’s numbers.

Despite signs of easing price pressures, according to some economists, this was not enough to raise optimism.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote the following, “A fall in gas prices would normally be enough to boost small business owner sentiment, but the hit from higher interest rates and stock market volatility are more powerful forces right now.” ” Redemption. “As a result, the index is now at levels that have followed recessions in the past.”

Also Read :  Upcoming events in the Houston area

Labor remains the second biggest issue for small businesses, with 41% of all owners reporting job openings they could not fill in the current period.

Seventy-five percent of employers reported hiring or trying to hire in December, and 93% of businesses that were hiring or trying to hire reported having few or no qualified applicants for open positions. gave information.

Still, the survey’s hiring metrics show an adjusted net 17% of small businesses — or the difference between those planning to increase staff and those planning to reduce staff — expect to create new jobs over the next three months. are planning. However, this number is lower than the 32% seen in August 2021.

Also Read :  School Jobs Scam: There was rampant corruption, so I had to order CBI probe, says Calcutta HC judge

“The widely anticipated (projected) recession did not come in 2022, but there is still hope this year,” the report said. “The negative impact of the dramatic increase in interest rates has not been fully felt, and more rate hikes early in the year are almost certain.”

A net 17% of small businesses plan to increase staff, down from last year's high but still high relative to the post-financial crisis economic recovery.  (Source: NFIB)

A net 17% of small businesses plan to increase staff, down from last year’s high, but still high relative to the post-financial crisis economic recovery. (Source: NFIB)

Dani Romero is a reporter for Yahoo Finance. follow him on twitter @daniromerotv

Click here for latest economic news and economic indicators that will help you with your investment decisions

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for apple either Android

Follow Yahoo Finance Twitter, Facebook, instagram, menu, linkedinAnd youtube



Source

Leave a Reply

Your email address will not be published.