Confidence among U.S. small businesses fell again in September due to continued concerns about inflation and labor shortages, according to a survey released on Tuesday.
The Small Business Optimism Index fell half a point last month, to 90.8, according to the National Federation of Independent Business (NFIB). The September index also remained below its 49-year average of 98 points for the 21st consecutive month.
The tone of the September report was similar to August, which saw the first decline in optimism since April, with companies pointing to labor market tightness and inflation as major concerns.
“Owners remain pessimistic about future business conditions, which contributes to their lack of optimism about the economy,” said Bill Dunkelberg, NFIB chief economist. “Sales growth among small businesses has slowed and the bottom line has been squeezed, leaving owners with little choice but to raise sales prices to gain financial relief.”
Amid the Federal Reserve’s most aggressive interest rate hike campaign in decades, small businesses are facing higher borrowing costs for credit. Widespread economic uncertainty around forecasts of a future recession has also increased, weighing on business prospects.
The proportion of owners who expect better business conditions in the next six months fell six points, to a net negative of 43%. The share of employers who said inflation was their top concern remained unchanged at a seasonally adjusted 23%, tied with the share citing job difficulties.
Companies in the construction, retail, manufacturing and service sectors frequently cite labor shortages as a key concern. 93% of companies active in the recruitment market say that they have not found or found few qualified workers for their positions.