US' small business optimism drops again in March 2023: NFIB

In particular, 43 per cent of owners reported job openings that were hard to fill, down four points from February but still historically very high.

Twenty-four per cent of owners reported inflation as their single most important business problem, down four points from last month. The net per cent of owners raising average selling prices decreased one point to a net 37 per cent seasonally adjusted. The net per cent of owners who expect real sales to be higher deteriorated six points from February to a net negative 15 per cent, as per the NFIB index.

Small business owners expecting better business conditions over the next six months remained at a net negative 47 per cent. However, a seasonally adjusted net 15 per cent of owners are planning to create new jobs in the next three months.

Fifty-seven per cent of owners reported capital outlays in the next six months, down three points from February.

A net negative 6 per cent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, and a net negative 4 per cent of owners plan inventory investment in the coming months, up three points from February, according to the NFIB index.

The frequency of positive profit trends was a net negative 18 per cent, five points better than in February. Among owners reporting lower profits, 31 per cent blamed weaker sales, 23 per cent blamed the rise in the cost of materials, and 8 per cent cited labour costs. For owners reporting higher profits, 48 per cent credited sales volumes and 21 per cent cited higher prices.

Overall, the small business sector showed little strength from capital spending. While credit is still available, a net 9 per cent reported their last loan was harder to get than in previous attempts, up four points. Three per cent reported that financing was their top business problem.

Despite these challenges, the small business owners remain resilient, with 59 per cent saying they are not interested in a loan, and a net 22 per cent planning to raise compensation in the next three months.

“Small business owners are cynical about future economic conditions,” said NFIB chief economist Bill Dunkelberg. “Hiring plans fell to their lowest level since May 2020, but strong consumer spending has kept main street alive and supported strong labour demand.”

ALCHEMPro News Desk (DP)