Magnolia State News

NFIB's latest survey indicates a continued decline in small business optimism, coinciding with ongoing challenges in the labor market and inflationary pressures. According to NFIB State Director Dawn McVea, “the latest monthly decline in the NFIB Small Business Optimism Index underscores the ongoing challenges facing Mississippi’s job creators.”

Current issues affecting small business owners include severe labor shortages and persistent inflation. “Inflation is still driving up the cost of doing business, but labor remains an immediate concern for small business owners,” McVea said. She added that without sufficient workforce, service levels drop, and inflation continues to impact pricing across various sectors.

The NFIB Small Business Optimism Index for April decreased by 1.1 points to 89.0, maintaining a streak of 16 months below the long-term average of 98. Labor quality was reported as the primary issue by 24% of respondents, inching out inflation, which was identified as the second-most significant problem by 23%.

“Optimism is not improving on Main Street as more owners struggle with finding qualified workers for their open positions,” stated NFIB Chief Economist Bill Dunkelberg. He noted that while inflation remains a major issue, there are signs of it easing.

Several key insights emerged from the survey data. Reports of positive profit trends showed a net negative of 23%, a decline by five points from March. The net percentage of owners who found their inventory levels too low dropped six points, standing at a net negative of 5%. The proportion of owners increasing average selling prices decreased by four points to a net 33%.

In addition, expectations for higher real sales deteriorated four points to a net negative 19%, reflecting the sentiment expressed in NFIB’s monthly jobs report wherein a net 17% of owners intend to create new jobs in the coming months. Compensation rises were recorded by a net 40% of respondents, with another 21% planning to raise compensation.

Meanwhile, capital expenditures remain on a slight decline, with 56% reporting capital outlays in the last six months and just 19% planning such in the near future. Construction was noted as being less impacted by shortages than other sectors due to lower home sales driven by increased interest rates.

Other issues identified by small business owners included supply chain disruptions experienced by 18% of respondents as having a significant impact, financing difficulties faced by to 4% of respondents, and higher borrowing costs affecting 26% who reported higher rates on their most recent loans.

As the survey continues to track these trends, the NFIB Research Center has noted persistent challenges as small businesses navigate labor shortages, inflation, and supply chain issues. The results highlight the key areas of concern for small business leaders across the nation.