SURVEY: Small business owners remain uncertain after election

NASHVILLE – The NFIB Small Business Optimism Index declined 2.6 points in November to 101.4 but remains well above the 47-year historical average reading of 98. Six of the 10 Index components declined and four increased. The NFIB Uncertainty Index decreased 8 points to 90, still a historically high reading. Owners expecting better business conditions over the next 6 months declined 19 points to a net 8%.

“Small business owners are still facing major uncertainties, including the COVID-19 crisis and the upcoming Georgia runoff election, which is shaping how they’re viewing future business conditions,” said NFIB Chief Economist Bill Dunkelberg. “The recovery will remain uneven as long as we see state and local mandates that target business conditions and disproportionately affect small businesses.”

State-specific data is unavailable, but NFIB State Director Jim Brown said, “Our members are optimistic about us getting a COVID-19 vaccine sooner rather than later, but there is a lot of uncertainty over the U.S. Senate runoff election down in Georgia because the outcome is going to determine what comes out of Congress in 2021.”

Key findings include:

  • Earnings trends over the past 3 months declined 4 points to a net negative 7% reporting higher earnings quarter over quarter.
  • Inventory investment plans for the next 3 to 6 months decreased 7 points from a 48-year record high of a net 12% in October to a net 5% in November.

As reported in NFIB’s November jobs report, finding qualified employees remains a problem for small business owners with 89% of those hiring or trying to hire reporting few or no “qualified” applicants for the positions they were trying to fill. Twenty-seven percent of owners reported few qualified applicants for their open positions and 20% reported none.

Six percent of owners cited labor costs as their top business problem (down 2 points), but 24% said that labor quality was their top business problem (up 2 points), exceeding the percentages that selected taxes, regulations, and weak sales as their top problem.

Fifty-three percent reported capital outlays in the last six months, unchanged from October’s reading. Of those making expenditures, 38% reported spending on new equipment (up 2 points), 24% acquired vehicles (up 4 points) and 17% improved or expanded facilities (up 1 point). Five percent acquired new buildings or land for expansion (unchanged) and 13% spent money on new fixtures and furniture (up 1 point). Down 1 point from October, 26% of owners plan capital outlays in the next few months.

A net 5% of all owners (seasonally adjusted) reported higher nominal sales in the past 3 months, down 1 point from October but holding at the current recovery level. The net percent of owners expecting higher real sales volumes decreased 1 point to a net 10% of owners, a solid reading.

The net percent of owners reporting inventory increases rose 1 point to a net negative 4%. The net percent of owners viewing current inventory stocks as “too low” remained at 5%, up 1 point from October. Plans to invest in more inventory accumulation collapsed from record levels as expected business conditions weakened, falling 7 points to a net 5% of all firms.

The net percent of owners raising average selling prices increased 3 points to a net 18% (seasonally adjusted). Unadjusted, 8% of owners reported lower average selling prices and 23% reported higher average prices.

Price hikes were the most frequent in retail (28% higher, 4% lower) and wholesale (23% higher. 7% lower). Seasonally adjusted, a net 21% of owners plan price hikes (up 1 point).

A net 24% of owners reported raising compensation, and a net 20% plan to do so in the coming months.

The frequency of reports of positive profit trends decreased 4 points to a net negative 7% reporting quarter-on-quarter profit improvement, historically a favorable reading. Among owners reporting weaker profits, 55% blamed weak sales, 8% cited usual seasonal change, 8% cited a higher cost of materials, 6% cited lower prices and 3% cited labor costs. For owners reporting higher profits, 73% credited sales volumes, 9% cited usual seasonal change and 8% cited higher prices.

Two percent of all owners reported that all their borrowing needs were not satisfied, 25% reported all credit needs were met and 58% said they were not interested in a loan. A net 2% reported their last loan was harder to get than in previous attempts.

One percent of owners reported that financing was their top business problem, unchanged from last month. The net percent of owners reporting paying a higher rate on their most recent loan was negative 4%, up from negative 6 points in October. Twenty-two percent of all owners reported borrowing on a regular basis, down 3 points.

Click here to view the full report.

About NFIB

For more than 75 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit

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