Small businesses around the United States have lost confidence in the rebounding economic recovery, according to a new survey done by the National Federation of Independent Business (NFIB). This survey, conducted according to how businesses felt in July, reveals that the Optimism Index fell by about 2.8 points to 99.7. As a result, this erased almost all of the gain experienced in the Optimism Index in June
The NFIB survey also reveals that 27% of businesses have plans to try to create new jobs in the next three months. Meanwhile, 49% reported that they had unfilled job openings. 57% of those surveyed also revealed that they had few or no qualified applications to their job openings.
Confidence in the rebounding economy has faltered for many reasons for small business owners. For the most part, business owners have been left frustrated with the lack of job hirings. Consumer demand has surged for both goods and services this year as the economy rebounded after the 2020 COVID-19 pandemic, but small businesses have had trouble meeting this demand because of nationwide labor shortages.
Economists initially forecasted that many Americans would return to the workforce in the summer. While hirings have picked up, it hasn’t reached the stage that many estimated it would. Businesses, especially small businesses, have suffered to do businesses with a small staff.
As a result, there has been a loss of confidence in the strength of the economy, especially as many small business owners expect there to be a slowdown in job creation overall in the next few months. Initially, many analysts projected an economic growth not seen since the 1980s. Now, however, there are signs that this economic growth could be slowing down.
This is for many reasons. Possibly most detrimental to economic growth is the global supply chain bottlenecks that have affected businesses both small and large. These supply chain bottlenecks have negatively impacted many businesses’ inventory and what they have in stock. Labor shortages, as well as material shortages, have also affected business activity. Finally, inflation concerns have also slightly affected business activity.
Concerns over the ongoing COVID-19 pandemic has also left some small business owners wary of what the future may hold. While no major laws or regulations have been put back in place on a governmental level, many are waiting to see if the Delta variant of the virus continues to affect businesses negatively. While data has yet to show the variant negatively affecting how consumers are spending at businesses, there are still major worries that business owners have, especially when they remember everything that happened in 2020.
Economists do believe that hiring will more than likely pick up in the next few months, though, which may help how small businesses feel about the economic recovery. As more children and students head back to school, many believe that more Americans will naturally return to the workforce. Lack of childcare has been a major issue for many Americans these past few months, so many may have the capability to return to work once their children return to school.