Small businesses still cite inflation as top concern

(The Center Square) – Newly released survey data shows that small businesses are still feeling the pain of inflation.

The National Federation of Independent Businesses released new survey data Monday showing that a quarter of small business owners cite inflation as the number one problem in operating their business, more than any other issue.

While small businesses have consistently cited inflation as a top concern, the percentage who did so in July rose 4 points from the previous month.

Inflation forces small businesses to pay more for supplies, but they are often afraid to raise their own prices at the same rate for fear of losing customers. That means small businesses can cut into their revenue as inflation climbs.

Notably, the survey also found an increase in economic optimism by 2.2 points last month to 93.7, a noteworthy increase but still lower than the 31-year average since NFIB began tracking the data.

“Despite this increase in optimism, the road ahead remains tough for the nation’s small business owners,” NFIB Chief Economist Bill Dunkelberg said in a statement. “Cost pressures, especially labor costs, continue to plague small business operations, impacting their bottom line. Owners are heading towards unpredictable months ahead, not knowing how future economic conditions or government policies will impact them.”

While inflation has slowed in recent months, prices have risen more than 20% since Biden took office.

Economists are bracing for more inflation data expected to be released this week, especially after major losses in the stock market last week fueled economic uncertainty.

“Price hikes were the most frequent in the finance (57% higher, 6% lower), wholesale (47% higher, 9% lower), retail (40% higher, 14% lower), and construction (38% higher, 7% lower) sectors. Seasonally adjusted, a net 24% plan price hikes in July,” NFIB said in its release of the data. “This is the lowest reading since April 2023.”