MONTGOMERY, Ala. – Labor quality has surpassed inflation as the No. 1 issue facing small businesses, according to a recent survey by the National Federation of Independent Businesses’ Research Center.
“Small businesses continue the struggle to find employees to fill jobs, particularly in the trade and technical sectors,” NFIB State Director Rosemary Elebash said in a press release. “Businesses are paying overtime in order to deliver the services their clients need, but that coupled with inflation means higher prices for customers.”
Of the NFIB-member businesses surveyed in April, 24% cited labor quality as their biggest issue, followed by inflation at 23%, according to the survey.
“Optimism is not improving on Main Street as more owners struggle with finding qualified workers for their open positions,” NFIB Chief Economist Bill Dunkelberg said in the written statement.
Alabama’s labor force participation currently sits just under 57%, a major concern for industry, education and elected leaders in the state.
The survey also revealed 5% fewer reports of positive profit trends than the survey conducted in March. Weaker sales, cost of materials, typical seasonal change, labor costs and higher taxes or regulatory costs are to blame for lower profits for businesses, according to the survey.
Also worse than March by six points, 5% of businesses viewed inventory stocks as “too low.” Shortages are most frequent in manufacturing at 10%, agriculture and retail at 9%, and wholesale at 8%, according to the release.
However, 33% of business owners said they planned on raising prices, which is four points less than March, according to the release. Twelve percent of businesses reported lower average selling prices, while 48% reported higher average prices.
As far as three month plans for businesses go, owners plan to fill open positions and 17% plan on creating new jobs, according to the survey. Seasonally adjusted, a net 40% reporting raising compensation, with 21% of businesses planning to in the next three months.
“Inflation remains a top concern for small businesses but is showing signs of easing,” Dunkelberg said.