Uncertainty grows among still-optimistic small business owners, survey finds

Uncertainty grew among American small business owners in January while optimism remained high, according to a new survey from the National Federation of Independent Business (NFIB). 

The group’s uncertainty index rose 14 points to 100 last month, the third-highest recorded reading.

The Small Business Optimism Index also took a slight dip. It stood at 102.8 as of January, according to the NFIB survey. 

While that represented a 2.3-point decline in optimism on a monthly basis, it was still higher than the 51-year average of 98. The Small Business Optimism Index hit a six-year high in December. 

In January, a seasonally adjusted net 47% of small business owners harbored expectations for the economy improving, according to the survey. That dropped five points. 

Meanwhile, 17% indicated they were bullish about expansion, saying now was a “good time” to do so “substantially,” according to the NFIB. 

“Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise,” NFIB Chief Economist Bill Dunkelberg said in a statement. “Hiring challenges continue to frustrate Main Street owners as they struggle to find qualified workers to fill their many open positions. Meanwhile, fewer plan capital investments as they prepare for the months ahead.” 

Over one-third of small business owners said they were experiencing difficulties filling openings at their companies in January, the survey showed. 

TRUMPONOMICS WILL TAME INFLATION – NOT MAKE IT WORSE

More than half of owners surveyed were looking to bring new workers on board at their small businesses in January. Many of those – 90% – were finding “few or no qualified applicants,” the NFIB said. 

Labor quality and inflation were tied in January as the “single most important problem for business,” according to the NFIB. Eighteen percent of small business owners cited either of those as their main issue, with the share pointing to labor quality posting a one-point drop from the prior month. 

Inflation measured by the Consumer Price Index increased 0.4% month over month and 2.9% year over year in December, according to the Bureau of Labor Statistics.

When it came to capital outlays, a seasonally adjusted 22% of small business owners are looking to make investments in the coming six months, the NFIB also found. That share fell seven points. 

About 58% reported capital outlays over the past half year, according to the survey.