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According to a monthly poll of small business owners from the
National Federation of Independent Business, the uncertainty
index in January rose 14 points to 100 – the third highest
recorded reading, after two months of decline. The NFIB said
small business owners are feeling less confident about investing
in their business due to uncertain business conditions in the
coming months.
The response mirrors overall consumer confidence, which
plummeted in February, the biggest monthly decline in more than
four years, with inflation seemingly stuck and a trade war under
President Donald Trump seen by a growing number of Americans as
inevitable.
In the NFIB poll, optimism fell by 2.3 points in January to
102.8, but remained high. Optimism surged after the presidential
election, and the index still topped the the 51-year average of
98 for the third month in a row.
“Overall, small business owners remain optimistic regarding
future business conditions, but uncertainty is on the rise,”
said NFIB Chief Economist Bill Dunkelberg. “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.”
Eighteen percent of owners reported that inflation was their
single most important problem in operating their business, down
two points from December and matching labor quality as the top
issue.
Labor remains a top headache. A seasonally adjusted 35% of all
small business owners reported job openings they could not fill
in January, unchanged from December. Of the 52% of owners hiring
or trying to hire in January, 90% reported few or no qualified
applicants for the positions they were trying to fill.
And fewer small businesses are planning capital investments to
expand their business. Twenty percent plan capital outlays in
the next six months, down seven percentage points from December.
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