Magnolia State News

The latest report from the National Federation of Independent Business (NFIB) highlights the ongoing challenges faced by small businesses in Mississippi. According to NFIB State Director Dawn McVea, the recent decline in the NFIB Small Business Optimism Index underscores these difficulties.

"Inflation is still driving up the cost of doing business, but labor remains an immediate concern for small business owners," McVea stated. She emphasized that without sufficient workforce availability, Main Street businesses struggle to meet customer expectations while inflation impacts prices broadly.

In April, the national NFIB Small Business Optimism Index dropped by 1.1 points to 89.0, marking the 16th consecutive month below its historical average of 98 over 49 years. Labor quality emerged as the top issue for businesses at 24%, with inflation closely following at 23%.

NFIB Chief Economist Bill Dunkelberg noted, "Optimism is not improving on Main Street as more owners struggle with finding qualified workers for their open positions." He also mentioned that although inflation remains a major concern, there are signs it may be easing.

Key findings from the survey revealed several trends:

- Reports of positive profit trends were a net negative 23%, worsening by five points since March.

- A net negative 5% of owners considered their inventory stocks too low in April, down six points from March.

- The percentage of owners raising average selling prices fell four points to a net 33%.

- Expectations for higher real sales decreased by four points to a net negative 19%.

The survey showed that plans to fill open positions remain high among business owners, with a seasonally adjusted net 17% planning job creation within three months. Additionally, compensation adjustments continue with a net 40% reporting increased wages and a further net 21% planning raises soon.

Regarding capital outlays over six months, fifty-six percent of owners reported expenditures—slightly down from March—with investments primarily in new equipment and vehicles. Nineteen percent plan future capital outlays.

Sales figures reflected some challenges as well; nominal sales saw a decline reported by a net negative nine percent of all owners over three months. Inventory increases also saw declines with reports indicating supply chain disruptions impacting businesses significantly or moderately for many respondents.

The survey indicated industry-specific shortages most frequently occurring in manufacturing and agriculture sectors among others. Price changes varied across industries like construction and retail where higher average prices were common.

Profitability issues were linked largely to weaker sales and rising material costs according to those experiencing losses. Conversely, increased sales volumes contributed significantly to higher profits for some respondents.

Credit access appeared stable for most; two percent reported unmet borrowing needs while thirty percent had all credit requirements satisfied. Interest rates on loans rose slightly according to twenty-six percent of surveyed business owners.

Since its inception in late 1973 and subsequent monthly surveys starting in 1986, NFIB's Small Business Economic Trends data has provided insights into economic conditions affecting small enterprises nationwide through randomly selected members' responses each month—the latest conducted this past April.