Expectations for business conditions among small firms in America have never been worse.
That was the headline takeaway from the latest vintage of the NFIB survey, out Tuesday.
Small business owners expecting better business conditions over the next six months fell slightly in April, to a net negative 50%, the lowest ever recorded in nearly five decades of data. (figure below).
The one-point monthly decline came on the heels of a large drop in the measure during the prior month.
As you can imagine, inflation continued to bedevil small firms. Nearly a third said price pressures are their single-most vexing issue. At 32%, that figure is the highest since Q4 1980.
Nearly half of business owners said they had job openings they can’t fill. Notably, prospective workers are balking at offers. “The labor supply is not responding strongly to small businesses’ high wage offers,” NFIB Chief Economist Bill Dunkelberg remarked.
Last week, ADP said small firms shed 120,000 jobs in April, among the largest one-month declines on record (figure below).
That, I suggested, was indicative of intense competition for scarce workers. Hiring among large employers was robust last month according to ADP, whose chief economist Nela Richardson said that “as the labor market tightens, small companies… struggle with competition for wages amid increased costs.”
93% of businesses currently trying to hire said there were few qualified applicants. Or none at all.
Dunkelberg on Tuesday likewise described small business owners as “struggling” with inflation pressures. A net 70% reported raising their own prices, down two points from March’s record level. A net 46% plan to hike prices going forward. Just 8% of owners said they weren’t affected by supply chain problems.
At 93.2, the headline NFIB gauge was unchanged from March (figure below).
April was the fourth straight month below the survey average and the second consecutive month near the listless nadir seen in April of 2020, when a sweeping federal rescue was required to prevent mass failures.
All in all, it was another bleak read on America’s small businesses, which means I’m obliged to punctuate this brief recap with the usual reminder: Small firms account for around half of all private sector employment in the US.
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I have noticed a couple of favorable price cracks appearing in my local family owned supermarket. The prices of most meat products, including their delightful fillets fell by 20-25% — I stocked up.