US small biz optimism falls slightly as uncertainty eases in Oct

The uncertainty index fell by 12 points from September to 88, the lowest reading this year, according to the survey, all figures in which are seasonally adjusted.

Thirty-two per cent of all owners reported job openings they could not fill in the current period, unchanged for the second consecutive month. Before August, the last time unfilled job openings hit 32 per cent was in December 2020.

In October, 27 per cent of small business owners cited labour quality as their single most important problem—up by 9 points from September and the highest level since the record high of 29 per cent in November 2021. Labour quality ranked as the top problem and was 11 points higher than taxes, which ranked second.

The frequency of reports of positive profit trends fell by 9 points from September to a net negative 25 per cent. This component contributed the greatest to the decline in the optimism index.

In October, both actual and planned price increases fell from the previous month. The net per cent of owners raising average selling prices fell 3 points from September to a net 21 per cent. Looking forward to the next three months, a net 30 per cent plan to increase prices—down by 1 point from September.

The net per cent of owners reporting inventory gains fell 3 points to a net negative 6 per cent. Without seasonal adjustment, 10 per cent reported increases in stocks (unchanged), and 15 per cent reported reductions—up by 3 points.

In October, 60 per cent of US small business owners reported that supply chain disruptions were affecting their business to some degree—down by 4 points from September.

The net per cent of owners expecting better business conditions fell by 3 points from September to a net 20 per cent, the lowest level since April but remaining above the historical average of net 4 per cent.

“Optimism among small businesses declined slightly in October as owners report lower sales and reduced profits,” said NFIB chief economist Bill Dunkelberg in a release.

“Additionally, many firms are still navigating a labour shortage and want to hire but are having difficulty doing so, with labour quality being the top issue for Main Street,” he noted.

Fifty-five per cent of small business owners reported capital outlays in the last six months—down by 1 point from September.

A net negative 13 per cent of all owners reported higher nominal sales in the past three months—down by 6 points from September. The net per cent of owners expecting higher real sales volumes fell by 2 points from September to a net 6 per cent.

The net per cent of owners reporting inventory gains fell by 3 points to a net negative 6 per cent. Without seasonal adjustment, 10 per cent reported increases in stocks, and 15 per cent reported reductions.

A net negative 4 per cent of owners viewed current inventory stocks as ‘too low’ in October—up by 3 points from September’s largest monthly decline in the survey’s history. A net negative 2 per cent of owners plan inventory investment in the coming months—down by 3 points from September.

In October, owners’ overall assessment of their business’ health declined from the previous month as more owners reported it as ‘fair’ than ‘good’. When asked to evaluate the overall health of their business, 12 per cent reported it as excellent (up by 1 point), and 51 per cent reported it as good (down by 6 points).

Thirty-three per cent reported the health of their business as fair (up by 6 points), and 4 per cent reported it as poor (unchanged).

The net per cent of owners expecting better business conditions fell by 3 points from September to a net 20 per cent—the lowest level since April but remaining above the historical average of net 4 per cent.

In October, 13 per cent reported that it is a good time to expand their business—up by 2 points from September.

ALCHEMPro News Desk (DS)