Business optimism growing; inflation becomes top issue

(The Center Square) – Ohio small business owners continue to struggle with inflation despite growing optimism around the country, according to a new survey from the National Federation of Independent Businesses.

NFIB-Ohio released results from its monthly survey Tuesday, showing its Small Business Optimism Index rose 2.2 points in July, the highest reading since February 2022.

The 93.7 index, however, remained below the 50-year average of 98 for the 31st consecutive month. The reason, according to small business owners, is inflation.

“Inflation continues to hurt Ohio’s small businesses as prices have eased only slightly,” said Chris Ferruso, NFIB-Ohio state director. “Small business owners are making business adjustments and scaling back to accommodate the various cost pressures they are facing.”

According to the survey, 25% of small business owners reported inflation as the single most important problem in operating a business. That’s up 4 points from June.

“Despite this increase in optimism, the road ahead remains tough for the nation’s small business owners,” said Bill Dunkelberg, NFIB chief economist. “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 remained the top issue for businesses, 38% of all small business owners reported job openings they could not fill. Also, 86% of the owners trying to fill positions said they have few or no qualified applicants. Overall, 38% of all owners reported job openings they could not fill, up a point from June.

Thirty-three percent of owners said they raised wages in July, but that’s down 5 points from June and the lowest number since April 2021. At the same time, 22% said they are raising prices.

Also, the net percent of owners who expect higher sales rose 4 points in July, the highest of the year.