Florida small businesses continue to struggle with inflation despite regulatory changes

by | Jul 9, 2024

Despite a slight reprieve expected from newly-enacted legislation, inflation remains the most pressing issue for Florida’s small businesses.

Despite a slight reprieve expected from newly-enacted legislation, inflation remains the most pressing issue for Florida’s small businesses, according to the latest data from the National Federation of Independent Business (NFIB).

The NFIB Small Business Optimism Index reached its highest reading of the year in June at 91.5, a one-point increase from May. However, it marks the 30th consecutive month below the historical average of 98. Twenty-one percent of small business owners cited inflation as their most important problem, a slight decrease from the previous month but still presenting as a significant concern. The rising costs of materials and labor have led many businesses to raise their prices. The NFIB report noted that a net 27 percent of owners increased their average selling prices in June, a two-point rise from May.

“Inflation is affecting everybody, from manufacturers to retail businesses to customers,” Bill Herrle, NFIB State Executive Director. “It’s increasing the cost of everything from raw materials to labor.”

House Bill 433, signed into law by Gov. Ron DeSantis in April, seeks to standardize employment regulations across the state by preventing local governments from establishing their own minimum wage or employment benefits for private employers. While lawmakers contend that the measure will thwart inflationary increases, Herrle remains skeptical.

“Small businesses will see some relief from House Bill 433, which blocks local governments from creating a patchwork of minimum wage mandates, but market forces are still driving up prices and pushing up wages throughout the state and across the country,” he said.

Compounding concerns over rising costs, the broader economic environment remains challenging for small businesses, according to NFIB. The group’s report indicated that 37 percent of small business owners had job openings they could not fill, down five points from May. Additionally, a net 22 percent plan to raise compensation in the coming months as a result of the ongoing struggle to attract and retain qualified employees.

Capital outlays have also declined, with only 52 percent of owners reporting expenditures in the past six months, the lowest rate since August 2022. Of those making expenditures, 35 percent reported spending on new equipment, 22 percent acquired vehicles, and 14 percent improved or expanded facilities. Ten percent spent money on new fixtures and furniture and 5% acquired new buildings or land for expansion.

“Main Street remains pessimistic about the economy for the balance of the year,” NFIB Chief Economist Bill Dunkelberg noted. “Increasing compensation costs have led to higher prices all around. Meanwhile, no relief from inflation is in sight for small business owners as they prepare for the uncertain months ahead.”


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