Small-business owners are not looking forward to the holiday season in a good mood. In fact, numbers show they’re not very optimistic about the economy changing for the better anytime soon.
The National Federation of Independent Business (NFIB) has been taking the pulse of America’s small-business owners for the last 50 years, and three of its research publications released this month measured the saturnine mood hanging over the Main Streets of the nation.
The latest release of NFIB’s monthly Small Business Economic Trends (SBET) report — considered the bellwether measurement of the Main Street economy — showed the percentage of small-business owners who are expecting better business conditions over the next six months fell four points, to a net negative 37%. It's a decline of 17 points over the past three months to the report's lowest level since November 2012.
Likewise gloomy was NFIB’s last jobs report, also a monthly publication, which showed continued historic highs in unfilled job openings despite record increases in pay offered.
New to the NFIB's stable of research vehicles are the occasional COVID-19 polls. The Federation began taking the polls at the beginning of the pandemic to find out if its members were applying for Paycheck Protection Program loans and, equally important, getting the money. Now the polls incorporate responses to other questions related to COVID, including, in the latest poll, supply-chain disruptions. Two of its findings make for sobering reading:
- Supply chain disruptions are becoming increasingly challenging for many small business owners to the point where over half (62%) are experiencing disruptions that are worse, now, than three months ago.
- Almost all small business owners (90%) anticipate the supply-chain disruption that is impacting their business to continue for five or more months.
The current economic climate has even U.S. Federal Reserve Chairman Jerome Powell perplexed, as he noted during a Fed Listens session.
“I’ve never seen these kinds of supply-chain issues," Powell said, "never seen an economy that combines drastic labor shortages with lots of unemployed people. ... So, it’s a very fast changing economy. It’s going to be quite different from the one (before).”
Add to the difficulties — which include creeping inflation — a Congress that is inexplicably punitive toward the main job creators of the nation. The number of tax increases and additional regulatory burdens it wants to yoke on the backs of small businesses is detailed by NFIB on a special webpage: nfib.com/smallbusinesssurvival.
Most stunningly, Congress had proposed either eliminating or radically emasculating the 20% small-business tax deduction Main Street won in the 2017 Tax Cuts and Jobs Act — the same one that had led to the hottest small-business economy in the nation’s history before the pandemic struck.
How do you make plans to hire more people, buy new equipment, or expand to a bigger place when your nation’s legislature is erecting barricades to your financial ability to do so? But, then, maybe you ought to get past the worries of workers shortages, supply-chain disruptions and inflation, first.
Speaking of legislatures, another big question is: can Colorado resist passing a progressive agenda that has been pent-up due to the need to battle the pandemic first. We’ll have the answer in 2022.
A tiny silver lining closing out this year is Gov. Jared Polis’s announcement that he wants to use some of the state’s budget surplus to pay down the more than $1 billion Colorado owes the federal government for loans it took out to shore up its unemployment insurance trust fund. This will alleviate, but not remove, a throbbing worry small-business owners had over the fat tab for UI taxes they were expecting the state to stick them with.
The good news on UI, and whatever increased revenues Small Business Saturday sales will bring on Nov. 27, are not huge enough counterweights to what lies ahead for mom-and-pop businesses. Hopefully the lumps of coal destined for the Christmas stockings of small-business owners will be delayed by a supply-chain disruption at the ports of Los Angeles and Long Beach.
Tony Gagliardi is Colorado state director for the National Federation of Independent Business.