The NFIB Small Business Optimism Index increased slightly in November by 0.2 points to 98.4. Four of the 10 Index components improved, four declined, and two were unchanged. The NFIB Uncertainty Index decreased four points to 63.

“As the end of the year nears, the outlook for business conditions is not encouraging to small business owners as lawmakers propose additional mandates and tax increases,” said NFIB Chief Economist Bill Dunkelberg. “Owners are also pessimistic as many continue managing challenges like rampant inflation and supply chain disruptions that are impacting their businesses right now.”

Key findings include:

• Owners expecting better business conditions over the next six months decreased one point to a net negative 38 percent, tied for the 48-year record low reading. This indicator has declined 18 points over the past four months to its lowest reading since November 2012.
• The net percent of owners raising selling prices increased six points to a net 59 percent (seasonally adjusted), the highest reading since October 1979.
• Seasonally adjusted, a net 54 percent of owners plan price hikes, up three points from October and a 48-year record high reading.
• Forty-eight percent of owners reported job openings that could not be filled, a decrease of one point from October.

As reported in NFIB’s monthly jobs report, small business owners continue to struggle to find workers to fill their open positions. Forty-eight percent (seasonally adjusted) of all small business owners reported job openings they could not fill in the current period, down one point from October. Overall, 60 percent of owners reported hiring or trying to hire in November.

Fifty-five percent of owners reported capital outlays in the last six months, down one point from October. Of those owners making expenditures, 39 percent reported spending on new equipment, 22 percent acquired vehicles, and 14 percent improved or expanded facilities. Six percent of owners acquired new buildings or land for expansion and 13 percent spent money for new fixtures and furniture. Twenty-seven percent of owners plan capital outlays in the next few months, down four points from October.

A net negative 2 percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up two points from October. The net percent of owners expecting higher real sales volumes increased two points to a net 2 percent.

The net percent of owners reporting inventory increases gained two points to a net 3 percent. Thirty-five percent of owners report that supply chain disruptions have had a significant impact on their business, 31 percent report a moderate impact, and 22 percent report a mild impact. Only 9 percent of owners report no impact from recent supply chain disruptions. A net 15 percent of owners viewed current inventory stocks as “too low” in November, up six points from October and a record-high level. A net 10 percent of owners plan inventory investments in the coming months, up two points from October and historically a very elevated reading.

The net percent of owners raising selling prices increased six points to a net 59 percent (seasonally adjusted), the highest reading since October 1979. Three percent (unadjusted) reported lower average selling prices and 59 percent reported higher average prices. Price hikes were the most frequent in wholesale (88 percent higher, 0 percent lower), construction (75 percent higher, 7 percent lower), and manufacturing (66 percent higher, 1 percent lower). Seasonally adjusted, a net 54 percent of owners plan price hikes, up three points from October and a 48-year record high reading.

A net 44 percent (seasonally adjusted) of owners reported raising compensation, unchanged from October and a 48-year record high reading. A net 32 percent plan to raise compensation in the next three months, also unchanged from October and a record high reading. Ten percent of owners cited labor costs as their top business problem and 29 percent said that labor quality was their top business problem.

The frequency of reports of positive profit trends remained at a net negative 17 percent. Among those owners reporting lower profits, 32 percent blamed the rise in the cost of materials, 25 percent blamed weaker sales, 9 percent cited labor costs, 9 percent cited the usual seasonal change, 16 percent cited lower prices, and 2 percent cited higher taxes or regulatory costs. For owners who report higher profits, 61 percent credited sales volumes, 11 percent cited usual seasonal change, and 17 percent cited higher prices.

Two percent of owners reported that all their borrowing needs were not satisfied, 23 percent reported all credit needs were met, and 65 percent said they were not interested in a loan. A net 2 percent reported their last loan was harder to get than in previous attempts. Zero percent of owners reported that financing was their top business problem. A net 2 percent of owners reported paying a higher rate on their most recent loan.

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. The survey was conducted in November 2021.

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