Small business sentiment in Florida down again

by | Feb 13, 2024

The National Federation of Independent Business (NFIB) reported a decline in its Small Business Optimism Index to 89.9 in January, indicating continued challenges with sales expectations, inflation, labor quality concerns, and investment adjustments among small businesses.

The National Federation of Independent Business (NFIB) published its latest Small Business Optimism Index on Tuesday, showing a decline of two points in January to 89.9, falling below the 50-year average of 98, and marking the 25th consecutive month of below-average readings.

A downturn was noted in sales expectations among small business owners, with those anticipating higher real sales falling 12 points to a net negative 16 percent, while inflation remains a pressing issue for 20 percent of business owners, down three points from the previous month.

Labor quality has now become the primary concern for 21 percent of small business owners, as plans to hire have decreased, with only a net 14 percent of owners planning to create new jobs in the next three months, the lowest since May 2020. Despite this, 39 percent of owners reported difficulty in filling job openings.

“Florida’s economy may be one of the most resilient in the country, but small business owners are frustrated that they’re still dealing with inflation and labor shortages in 2024,” said NFIB State Executive Director Bill Herle.

Among owners reporting lower profits, 32 percent blamed weaker sales, 15 percent blamed the rise in the cost of materials, 15 percent cited usual seasonal change, and 11 percent cited labor costs. For owners reporting higher profits, 49 percent credited sales volumes, 24 percent cited usual seasonal change, and 9 percent cited higher selling prices.

Capital outlays in the last six months were reported by 59 percent of owners, a slight increase from December, showing some level of investment and growth ambition among small businesses. Of these, 40 percent spent on new equipment, and 25 percent acquired vehicles.

Despite the challenging conditions, small business owners are adjusting their strategies. A net 22% of owners have raised selling prices to cope with inflation, a decrease of three points from December. This suggests a cautious approach to pricing amid economic uncertainty.

Moreover, 6 percent of owners reported that their last loan was harder to get than in previous attempts. Five percent of owners reported that financing was their top business problem and a net 18 percent of owners reported paying a higher rate on their most recent loan, down two points from December.

“Small business owners continue to make appropriate business adjustments in response to the ongoing economic challenges they’re facing,” said NFIB Chief Economist Bill Dunkelberg. “In January, optimism among small business owners dropped as inflation remains a key obstacle.”


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