US' small business optimism dips in September 2023: NFIB

A significant 23 per cent of small business owners highlighted inflation as their primary operational concern, mirroring last month's sentiment. This concern about inflation runs parallel to the challenge of labour quality, which is also cited by 23 per cent of owners.

Optimism about future business conditions were bleak. The outlook for the forthcoming six months has deteriorated by six points from August, standing at a net negative 43 per cent. However, this is an improvement from June's reading of a net negative 61 per cent, signifying that while conditions are still very much in recession, they are less dismal than earlier in the year.

Labour market challenges continued, with a striking 43 per cent of business owners struggling to fill job openings due to the scarcity of qualified applicants, an increase of three points from August. Nevertheless, intentions to hire remain strong, with a net 18 per cent of owners planning to create new jobs in the upcoming quarter.

Investments were a notable area of activity. A majority, 57 per cent of owners, reported capital outlays over the past six months. Prospective spending remains on the agenda, with 24 per cent planning further capital outlays soon.

Sales and inventory trends provided mixed signals. While a net negative 8 per cent reported higher sales in the past three months, the outlook for future sales volume is slightly more optimistic, albeit still at a net negative 13 per cent. Inventory gains are relatively stable, with a slight improvement to a net negative 3 per cent.

Pricing concerns persisted. The net percentage of owners increasing their average selling prices rose two points to 29 per cent. This inflationary trend is reflected in the 23 per cent of owners who cited inflation as their primary business challenge.

Profitability remained an area of concern, with a net negative 24 per cent reporting positive profit trends. Factors influencing this include weaker sales, rising material costs, labour costs, and regulatory burdens.

A mere 2 per cent of owners indicated unsatisfied borrowing needs, while a dominant 65 per cent expressed no interest in loans. However, a net 8 per cent found obtaining their most recent loan more challenging than before.

ALCHEMPro News Desk (DP)