Small and medium-sized businesses in the U.S. are pessimistic about their prospects, but not as pessimistic as they were two years ago.
The National Federation of Independent Business’ (NFIB) Small Business Optimism Index rose 2.2 points last month to 93.7, the highest level since February 2022, the organization said in a press release on Tuesday (Aug. 13).
Still, the index has remained below its 50-year average of 98 for 31 consecutive months, and small business owners continue to feel pressure from inflation, the report said. A quarter of business owners cite inflation as their biggest problem, up 4 percentage points from June.
“Despite growing optimism, the road ahead remains challenging for the nation’s small business owners,” NFIB chief economist Bill Dunkelberg said in a statement. “Cost pressures, particularly labor costs, continue to challenge small business operations and impact bottom lines. Owners face unpredictable months ahead, uncertain of how upcoming economic conditions and government policies will affect them.”
The report said 33% of employers (seasonally adjusted) increased compensation in July, down five percentage points from June and the lowest level in more than three years.
Additionally, the net percentage of owners expecting real sales volume to increase increased 4 percentage points in July to a seasonally adjusted net negative 9 percent, the highest figure for the year, the report said. The net percentage of owners expecting to increase their average selling price decreased 5 percentage points from June to a seasonally adjusted net 22 percent.
As PYMNTS wrote last month, the challenges facing small businesses following another dismal June NFIB report have led to the emergence of new working capital products and financial services.
These services can offer “more innovative and flexible solutions designed to protect businesses from ongoing economic fluctuations such as inflation, interest rate fluctuations and even currency fluctuations,” the report said.
These innovations include products such as virtual and commercial cards, supply chain finance, invoice finance and asset-backed lending, giving businesses faster access to capital, improved cash flow management and enabling them to invest in growth opportunities without incurring traditional debt.
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Read more about: B2B, B2B payments, commercial payments, economy, inflation, National Federation of Independent Business, news, NFIB, PYMNTS News, small business, trending news, B2B trending news
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