Small Business Caution
While some segments of the economy are perking along, and others are holding their own, there are undercurrents of concern based on some recent surveys.
As you heard on KXEL last week, while generally positive, the recent quarterly survey of the Iowa Association of Business and Industry showed owners anticipated stability as opposed to a lot of growth; not bad, but not as optimistic as was the case six months ago.
Now comes a broader survey from the National Federation of Independent Business…it shows the group’s optimism index decreased by nearly a point last month to the lowest level since December of 2012. Beyond that, for the 27th straight month, the number is below the 50-year average.
The continued adverse impact of inflation as well as a labor shortage are the key causes for the concern.
As NFIB notes, to keep up with elevated costs, small business owners have to pass higher prices onto customers, who are already burdened with pay not keeping up with inflation over the past few years…meaning family purchasing power continues to slide.
Beyond that, a growing number of small business owners say getting a loan is harder now than in the recent past, in addition to paying a higher interest rate even if they got the loan.
Given that small business is the heartbeat of America, this is of concern, and something to watch. It’s a bipartisan issue, but I’m afraid all we’ll hear this hyper-charged election year is more finger-pointing.
