Peace Garden News

The NFIB Small Business Optimism Index saw a decline of 2.3 points in January, reaching 102.8. This marks the third month in a row that the index has remained above its 51-year average of 98. Meanwhile, the Uncertainty Index rose by 14 points to 100, which is noted as the third-highest reading recorded after two months of decline.

"Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise," stated NFIB Chief Economist Bill Dunkelberg. He highlighted ongoing hiring challenges faced by Main Street owners due to difficulties in finding qualified workers and noted a decrease in plans for capital investments as businesses prepare for the upcoming months.

NFIB North Dakota State Director Don Larson commented on local impacts: "While the national uncertainty index rose 14 points to 100, small businesses reported raising compensation. This suggests continued economic activity despite broader market concerns." Larson also emphasized opportunities for legislative support: "The North Dakota Legislature has an opportunity to give Main Street businesses a hand by prioritizing pro-small business policies that lower costs and help strengthen the workforce."

The report detailed several key findings:

- The net percentage of owners expecting economic improvement dropped five points from December to a net 47%.

- Inflation was cited as the most significant problem by 18% of owners, down two points from December.

- The net percentage of owners increasing average selling prices decreased by two points to a net 22%.

- Thirty-five percent of all owners reported job openings they could not fill, unchanged from December.

- Twenty percent plan capital outlays within six months, down seven points from December.

- A net negative one percent viewed current inventory stocks as too low, consistent with December's figures.

As per NFIB’s monthly jobs report, 35% of small business owners had unfilled job openings in January. Among those hiring or attempting to hire, a significant majority found few or no qualified applicants.

Labor quality was seen as the primary issue for businesses by 18% of owners, while labor costs were identified as such by nine percent. Compensation increases were reported by a seasonally adjusted net 33%, up four points from December.

Fifty-eight percent reported making capital outlays over the past six months. Spending included new equipment (41%), vehicles (24%), and facility improvements (16%). A seasonally adjusted net negative fourteen percent reported higher nominal sales over three months.

Price hikes were notably frequent in finance (47% higher), retail (35% higher), wholesale (34% higher), and professional services (30% higher) sectors. Reports indicated varied reasons for profit trends with some attributing them to weaker sales or seasonal changes.

Three percent indicated unsatisfied borrowing needs while twenty-five percent had all credit needs met; sixty-two percent were uninterested in loans.

This survey data was collected by NFIB Research Center through random sampling from its membership base and released on February's second Tuesday.