(The Center Square) – Newly released survey data shows that small businesses are less optimistic than they have been in over a decade.
The National Federation of Independent Business released its small business optimism index for April, which showed a 0.9% decrease, dropping it to the lowest level since 2012.
“Small business optimism has reached the lowest level since 2012 as owners continue to manage numerous economic headwinds,” NFIB Chief Economist Bill Dunkelberg said in a statement.
Small business owners have face a range of challenges in recent years, from pandemic-era shutdowns, to shoplifting and crime issues, to soaring inflation and supply chain problems.
“Inflation has once again been reported as the top business problem on Main Street and the labor market has only eased slightly,” Dunkelberg said.
Notably, a quarter of business owners said inflation was their biggest problem running their business, a 2 point increase from the previous month. That concern matches the recent federal data.
The U.S. Bureau of Labor Statistics released its monthly Producer Price Index, and Consumer Price Index last month. The two key markers of inflation rose 0.6% and 0.4% respectively, significant increases.
As The Center Square previously reported, Jason Furman, Harvard professor and former economic advisor to President Barack Obama, said that the consumer price jump was “unusually high.”
“A net negative 10% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up three points from February,” the report said. “The net percent of owners expecting higher real sales volumes declined eight points to a net negative 18% (seasonally adjusted).”
Overall, the challenges have put many American businesses in a pinch.
“The frequency of reports of positive profit trends was a net negative 29% (seasonally adjusted), up two points from February, but still a very poor reading. Among owners reporting lower profits, 29% blamed weaker sales, 17% blamed the rise in the cost of materials, 13% cited usual seasonal change, and 12% cited price change,” the report said. “For owners reporting higher profits, 53% credited sales volumes, 23% cited usual seasonal change, and 12% cited higher selling prices.”
