Attitudes among small business owners have been bleak for nearly two years straight, according to a new national report. 

The National Federation of Independent Business’ monthly small business optimism index decreased by 0.6 of a point last month, reaching 91.3. This marks the 20th consecutive month optimism rates fell below the 49-year average of 98.

The report, released on Tuesday, found that 24% of small business owners said labor quality was their most important business problem. This comes as there are two unemployed Coloradans for every open job in the state, but a mismatch of workforce skills. In a close second, 23% of owners said inflation was their top issue, followed by 8% who said labor costs. 

“A lack of employees and the continued climb of inflation are preventing Main Street businesses from expanding,” said Tony Gagliardi, Colorado state director of NFIB. “When businesses can’t expand, the Main Street economy shrinks.” 

From July to August, small business owners who expect better business conditions over the next six months fell seven points, to a net negative 37%. Owners who expect higher sales fell two points, to a net negative 14%. The same percentage of owners reported higher sales in the past three months, which is the lowest rate since August 2020. 

Owners who have job openings that are difficult to fill improved, reaching 40% – down two points from July. However, 40% is still “historically high,” the report said.  

To address pessimism among small businesses, Gagliardi said the national government should continue tax deductions that are currently set to expire in 2025. In Colorado specifically, he said the upcoming ballot measure Proposition HH is bolstering negativity in the industry. 

Prop HH asks voters whether to slow property tax increases by reducing refunds from the Taxpayer’s Bill of Rights. In August, NFIB Colorado said 90% of its members oppose the measure, saying the small business owners support TABOR and desire predictability in rules, regulations and taxes. 

“The uncertainty surrounding the fate of Proposition HH is not helping matters,” Gagliardi said of small business optimism. “Our small business owning membership has spoken out against it. More people should declare their position.”