April NFIB US Small Business Rises, But Labor Shortage Concerns Remain
06:00 AM EDT, 05/11/2021 (MT Newswires) -- The National Federation of Independent Business's monthly Small Business Optimism Index rose to a reading of 99.8 in April from 98.2 in March, but businesses continue to report difficulty finding skilled workers to fill positions.
NFIB reported that a record 44% of small business owners reported having job openings that they could not fill, up from 42% in March, well ahead of the average 22% level over the last 48 years. In total, 59% of respondents report trying to hire workers in the month.
The April US employment report showed a much smaller payrolls increase than expected which many have noted was not an issue of reduced demand, but rather one of short supply.
"Small business owners are seeing a growth in sales but are stunted by not having enough workers," said NFIB Chief Economist Bill Dunkelberg. "Finding qualified employees remains the biggest challenge for small businesses and is slowing economic growth. Owners are raising compensation, offering bonuses and benefits to attract the right employees."
There were monthly increases in seven of the 10 component measures, compared with only two decreases and one unchanged reading. The largest increase was seen in the category that measures earning trends, which rose by 8 percentage points to a net negative 7%, which respondents attributed to lower sales volumes.
A net positive reading indicates that more respondents expect an increase than those expecting a decrease, and vice versa for a negative net reading.
The measure of capital outlay plans improved by 7 points to a net 27%. There were also gains in the readings for current inventories (to a net 7%) and time for expansion (to a net 14%).
The measure of current job openings rose to 44%, but plans to increase employment slip to 21%, though both reflect that hiring remains brisk. Businesses reported plans for increase compensation, which will be needed to attract workers.
The reading measuring future economic expansion fell by seven points to a net negative 15%.