The NFIB released the results of its May survey of small businesses this morning, and even though the report showed the outlook for business conditions collapsed to a record low, there were other at least partially promising signs under the hood. Primarily, the percentage of respondents reporting inflation as their biggest concern finally appears to have peaked. After reaching a record high of almost a third of responses in April, a still-elevated but improved, 28% of small businesses reported inflation as their biggest concern. The decline in concerns over inflation ranked as the largest decline of any reported problem, but conversely, “other” saw the largest increase as it rose 5 percentage points month over month. Now at 11%, that reading is near some of the highest levels on record going back to 2008 (this response does not have as long dated of a history as the others which go back to 1986)
While the percentage of respondents reporting inflation as their biggest concern has peaked for the time being, that is not to say fewer businesses are concerned about rising costs. Behind the increase in “Other”, the next biggest month-over-month increase was cost of labor which rose four percentage points. That brings it to the highest level since December on its own as well as on a combined basis with quality of labor (which was unchanged month over month).
Inflation was not the only reading to fall month over month as fewer respondents also reported taxes as their biggest concern. Alongside another government-related reading, government requirements and red tape, the combined reading is at a record low.
Government-related indices were not alone with record low readings. 0% of respondents indicated that competition from big businesses was their most pressing issue as well while poor sales and financials & interest rates are just off record lows of their own. Click here to learn more about Bespoke’s premium stock market research service.