Small businesses in the United States are grappling with ongoing challenges impacting their outlook on the economy. According to the National Federation of Independent Businesses (NFIB), a group representing small business owners, their Small Business Optimism Index increased slightly to 91.9 in December. However, this still falls below the 48-year average of 98, making it the 24th consecutive month with pessimistic readings.
One of the main concerns for small business owners is the persistent worker shortage and chronic inflation. Inflation has overtaken labor quality as the most significant threat, with about 23% of small business owners citing price increases as the top challenge in running their businesses. Around 36% of small business owners reported raising their prices to combat high inflation, while just 15% lowered their average selling prices.
Labor quality is another pressing issue, as low unemployment and rapid wage increases make it challenging for small businesses to compete with larger companies and hire employees. Approximately 20% of owners identified labor quality as their primary problem, with 36% of small business workers increasing compensation last month.
Overall, small business owners remain pessimistic about the economic prospects for the coming year, citing concerns about inflation and labor quality. These challenges are affecting their ability to operate and grow their businesses effectively……….[read more]
How do small businesses navigate the delicate balance between managing inflation-related price increases and maintaining customer loyalty?
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