Small businesses aren't optimistic about post-pandemic hiring

Sentiment among U.S. small businesses edged down in October as owners’ views of future economic conditions slumped amid continuing supply-chain and hiring challenges.

The National Federation of Independent Business optimism index slipped to 98.2 from 99.1, the lowest since March, the group said Tuesday. The group’s measure of business conditions over the next six months fell to the lowest since November 2012. The share of firms who said now is a good time to expand declined to an eight-month low as rising material and labor costs dampen profits.

“Small business owners are attempting to take advantage of current economic growth but remain pessimistic about business conditions in the near future,” NFIB Chief Economist Bill Dunkelberg said in a statement. “One of the biggest problems for small businesses is the lack of workers for unfilled positions and inventory shortages, which will continue to be a problem during the holiday season.”

Read more: Will small businesses survive the delta variant?

A record share of owners said they raised compensation and an unprecedented number are planning to in coming months as they seek to fill vacancies. Just under half reported job openings they could not fill, down slightly from September, but far above the measure’s historical average.

Some 39% of owners said supply-chain disruptions have had a significant impact on their business. A net 9% say inventory levels are “too low,” near a record high.