New Report Finds Most NJ Small Businesses Are Still Struggling Big Time
A new report on small business optimism is out and the news isn’t good.
According to Eileen Kean, the director of the New Jersey chapter of the National Federation of Independent Business, NFIB, inflation is still a significant problem.
“We’re seeing a leveling off, we’re seeing price increases slowing but they still exist,” she said.
Not a lot of optimism
The Optimism Index increased 0.5 points in January to 90.3, but it remains below the 49-year average of 98.
She said many small businesses continue to have a bleak outlook because “hiring remains very, very difficult, and I think it’s a quandary that none of us can actually get our hands wrapped around, because there are just not enough applicants to fill positions.”
Kean pointed out that these positions “can be for qualified as well as the service industry where you can be trained, and we’re still finding a problem.”
According to the Index, 45% of owners reported job openings that were hard to fill, up 4 points from December, remaining historically very high.
Few plans to expand
She said the survey also finds most smaller firms are not making any plans to expand.
“We’re still seeing that small businesses have no choice but to hold back, just because of inflation and problems staffing.”
The survey also finds the net percent of owners raising average selling prices decreased one point to a net 42% seasonally adjusted, and the net percentage of owners who expect real sales to be higher worsened by four points from December to a net negative 14%.
Also, the net percent of owners reporting inventory increases rose six points to a net 6%.
A new problem on the horizon?
Kean stressed small businesses continue to recover from the effects of the COVID pandemic, and if they are forced to replenish the Unemployment Trust Fund that was emptied during the pandemic shutdowns, it will make a bad situation even worse and create a crisis.
She said Gov. Phil Murphy and legislative leaders must find another source of income to refill the UI Fund.
The frequency of reports of positive profit trends in the survey was a net negative 26%, which was 4 points better than in December.
Among owners reporting lower profits, 27% blamed weaker sales, 26% blamed the rise in the cost of materials, 15% cited the usual seasonal change, 11% cited labor costs, 10% cited lower profits, and 2% cited higher taxes or regulatory costs. For owners reporting higher profits, 53% credited sales volumes, 23% cited usual seasonal change, and 11% cited higher prices.
The NFIB Research Center has collected small business economic trends data with quarterly surveys since 1973 and monthly surveys since 1986.