The NFIB’s Small Business Optimism Index Declines for Second Consecutive Month in February 2022

The National Federation of Independent Business (NFIB), one of the largest small business associations in the U.S., reported today (3-08-22) that their NFIB Small Business Optimism Index decreased by -1.4 points to a reading of 95.7 in February, the second consecutive month below the 48-year average of 98.

Twenty-six percent of owners reported that inflation was their single most important problem in operating their business, a four-point increase since December and the highest reading since the third quarter of 1981.

Thirty-seven percent of owners report that supply chain disruptions have had a significant impact on their business. Another 33% report a moderate impact and 21% report a mild impact. Only 8% of owners report no impact from the recent supply chain disruptions.

Other highlights of the report include:

1. The net percentage of owners raising average selling prices increased to a net 68% (seasonally adjusted), a 48-year record high reading.
2. Forty-eight percent of owners reported job opening that could not be filled, an increase of 1-point from January.
3. Owners expecting better business conditions over the next six months declined by 2-points to a net negative 35%.
4. Inventory accumulations plans fell -1%, on the heels of a 5-point drop in January and following a massive inventory build in Q4 of 2021.

In a statement prepared for the release of the February Index, NFIB Chief Economist Bill Dunkelberg said, “Inflation continues to be a problem on Main Street, leading more owners to raise selling prices again in February. Supply chain disruptions and labor shortages also remain problems, leading to lower earnings and sales for many.”