Inflation has become the number one concern among small business owners, according to the National Federation of Independent Business Index of Small Business Optimism released on Tuesday.
The June index reading fell 0.1 points to a recession-level reading of 89.2. Inflation beat out taxes, insurance, weak sales and all other business problems for the top spot. "The top concern of small business owners today is inflation - the first time since January 1981," said NFIB chief economist William Dunkelberg.
Twenty-nine percent of owners reported raising average selling prices in June compared to 13% reporting reductions. Thirty-six percent of small business owners polled cited plans to raise prices in the near future. "The inflation problem is getting worse, not better, as the economy weakens," Dunkelberg said.
Job creation declined sharply in June as small business owners reported a decline of 0.5 workers per firm. Eighteen percent of small business owners reduced jobs by an average of 4.6 workers per firm.
The credit crunch has largely avoided small business, as owners reported no difficulties in obtaining loans. Regular borrowing was reported by 35% of owners, unchanged from May. Only 7% of owners polled reported having difficulty receiving a loan while 2% of owners cited the cost and the availability of credit as their number one problem.
By Steve Stecyk and edited by Nancy Girgis