While being a small business owner or independent entrepreneur has always been a challenge, it seems even more so these days. Every time a small business owner turns around, there seems to be a new challenge just waiting to leap. An important factor for the success of any small business is reliable intelligence with regard to current conditions and expectations. Sometimes, the road ahead isn’t always that clear. The National Federation of Independent Businesses has recently released its economic outlook report for small businesses which covers a myriad of topics so that small business owners can get a handle on what is happening around the country. The following is taken directly from the latest published report issued by the NFIB:
- As the economy moves into the fourth quarter, the big question mark is LABOR, its availability, its cost, and the impact on inflation. Job creation has been volatile (but positive so far), ranging from 200,000 to
1 million jobs created per month. Total employment is still 5 million below its pre-Covid peak and the unemployment rate is 5.2%, well above the 3.5% pre-Pandemic low.
- For Main Street businesses, the clear problem now is finding enough labor to staff up to meet demand. Consumer spending has been very strong as the economy opened up and could carry the economy into
Q4. Savings are plentiful to support spending.
- Then there’s inflation. Not a problem as long as firms can pass rising input costs (including wages) on to customers in higher selling prices. But if consumers become price-shy, then profits will be squeezed and
firms will have to adjust costs quickly, including labor costs. With no government income supports, consumer spending will slow, making the fourth quarter the slowest growth quarter in 2021.
- And then there is the political uncertainty. Higher taxes and more regulations, in some cases by all levels of government. There is much to worry about for small business owners. Top all that off with Covid, and we get a very challenging year.
- Small businesses continue to struggle to find workers to fill open positions. Fifty percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up 1 point from July and a record high reading for the second consecutive month. The number of unfilled job openings remains far above the 48-year historical average of 22 percent.
- Over 37 percent of owners report supply chain disruptions have had a significant impact on their business. Another 29 percent report a moderate impact and 21 percent report a mild impact. Only 13 percent report no impact from recent supply chain disruptions.
-Written by Kevin Sawyer