Small business expectations remain at historic lows in September
WASHINGTON, DC (October 8, 2024) – The NFIB Small Business Optimism Index rose 0.3 points in September to 91.5. This is the 33rd consecutive months below the 50-year average of 98. The Uncertainty Index rose 11 points to 103, the highest reading on record. Fifty-one percent of owners have cashed out in the past six months, down five points since August. Meanwhile, the number of owners reporting earnings fell four points to a net negative 13% (seasonally adjusted), the lowest reading since June 2020.
“Small business owners are feeling more uncertain than before,” he said NFIB Chief Economist Bill Dunkelberg. “Uncertainty makes owners reluctant to invest in spending and buying, especially since inflation and payment costs continue to put pressure on them. Despite some hope ahead for the holiday shopping season, many Main Street owners are left questioning whether future business conditions will improve.
Key resources include:
- The net percentage of owners reporting earnings fell four points to a net negative 13% (seasonally adjusted), the lowest reading since June 2020.
- The average interest rate on short-term maturity loans was 10.1%, up 0.6 of a point from August. The last time it was this high was February 2001.
- Thirty-four percent (seasonally adjusted) of all employers reported job openings they could not fill at the current time, down six points from August and the lowest reading since January 2021.
- A net 12 owners reported paying higher taxes on their current mortgage, down three points from August and the lowest reading since March 2022.
- Fifty-one percent reported cash outflows in the past six months, down five points since August. The last time it was this low was July 2022.
- Seasonally adjusted, 35 percent of the net reported wage increases, down one point from August and remaining the lowest reading since April 2021.
- Twenty-three percent of owners reported that inflation is their single most important problem in the operation of their business (high input and labor costs), down one point from August but still a top issue.
As reported in the NFIB’s monthly jobs report, a seasonally adjusted 34% of all small business owners reported job openings they could not fill in their time, down six points from August and the lowest reading since January 2021. At 59% of owners hired. when trying to hire in September, 90% reported few or no qualified applicants for the positions they were trying to fill.
Fifty-one percent of owners have cashed out in the past six months, down five points since August. Of those who are spending money, 35% reported spending on new equipment, 23% acquired a car, and 15% renovated or expanded property. Ten percent spent money on new fixtures and furniture and 4% acquired new buildings or additional space. Nineteen percent (seasonally adjusted) plan to spend in the next six months, down five points from August.
A net negative 17% of all owners (seasonally adjusted) reported the highest sales of the title in the last three months, down one point from August and the lowest reading of this year. The net percentage of owners expecting higher actual sales volumes rose nine points to a negative net 9% (seasonally adjusted).
The net percentage of owners reporting their earnings fell four points to a net negative 13%, seasonally adjusted, the lowest reading since June 2020. Not seasonally adjusted, 10% reported stock increases and 22% reported stock reductions.
A negative net 4% (seasonally adjusted) of owners rated current stocks as “very low” in September, up one from August. A negative net 3% (seasonally adjusted) of owners plan to invest in the coming months, down two points from August.
The net percentage of owners raising average sales prices rose two points from August to a net 22% seasonally adjusted. Twenty-three percent of owners reported that inflation is their most important problem in running their business, down one point from August and remaining the top issue. Unadjusted, 13% reported lower average sales prices and 34% reported higher average prices.
Inflation was most pronounced in the financial (64% up, 4% down), retail (48% up, 9% down), transportation (41% up, 18% down), and construction (38% up, 12% lower) sectors. . Seasonally adjusted, the net 25% plan rises in September.
Seasonally adjusted, a net 32% reported raising wages, down one point from August and the rest and the lowest reading since April 2021. A seasonally adjusted net 23% plan to raise wages in the next three months, up three points from August. Nine percent of owners cited labor costs as their top business problem, unchanged from August and just four points below the top reading of 13% reached in December 2021. Seventeen percent said labor quality was their top business problem, lagging behind inflation as a number. another story.
The number of reports of positive profit trends was a net negative 34% (seasonally adjusted), up three points from August. Of the owners citing lower profits, 37% blamed lower sales, 14% blamed higher cost of goods, 13% cited lower labor costs, and 11% cited lower prices. Of the owners reporting higher profits, 47% attributed higher sales volumes, 26% reported normal seasonal changes, and 9% reported higher sales prices.
Two percent of owners reported that all of their credit needs were not met. Twenty-four percent said all credit requirements were met and 62% said they were not interested in the loan. A net 8% reported their last loan was harder to get than previous attempts.
Four percent of owners said money was their top business problem in September, unchanged from August.
The NFIB Research Center has compiled Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. The report is published on the second Tuesday of each month. The survey was conducted in September 2024.
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