Small Businesses See Dark Clouds For Economy As Inflation Eats Into Profits And New Taxes Loom
Small business owners are not particularly optimistic going into the final quarter of 2021, chalking up their pessimism to ongoing shortages, inflation and new taxes looming over the horizon.
Pent-up demand after more than 18 months of the COVID-19 pandemic is roaring ahead, pushing up prices and leaving businesses struggling to keep pace with it.
The National Federation of Independent Business (NFIB), one of the largest business associations representing small businesses in the U.S., found that these struggles and fears are chipping away at their members' confidence in the economy. Last month, the NFIB's optimism index slipped one point to 99.1, the lowest reading in six months, while its uncertainty index rose by five points to 74.
Many of the business owners surveyed by NFIB reported that persistent shortages of labor and supplies have impacted their outlook. Fifty-one percent (seasonally adjusted) of all owners reported vacancies but said they could not find workers to fill them, a finding NFIB says is ahead of the 48-year historical average of 22%. Competition with larger companies has been a leading cause for concern while some, particularly in the construction sector, complain that they cannot find many qualified applicants at all.