‘Every time you turn around, there’s a new price increase’: US small-business optimism plummets

A restaurant window in Medford, Massachusetts, on 25 January 2023. Photograph: Brian Snyder/ReutersView image in fullscreenA restaurant window in Medford, Massachusetts, on 25 January 2023. Photograph: Brian Snyder/ReutersUS news‘Every time you turn around, there’s a new price increase’: US small-business optimism plummetsAt the same time, 29% of small-business owners also report having open positions they can’t fill

Amid rising fuel prices and inflation across the US, confidence among small-business owners has declined in recent weeks as many continue to grapple with higher costs and economic uncertainty.

View image in fullscreenRoger, in Sevierville, Tennessee. Photograph: The GuardianAccording to the National Federation of Independent Business, its Small Business Optimism Index fell by 0.6 points to 95.3 in May. At the same time, 29% of small-business owners reported having open positions they could not fill – the lowest level since the Covid-19 pandemic.

In May, 13% of owners said labor quality was their biggest issue, while 14% identified labor costs as their primary challenge.

Beyond workforce pressures, several small-business owners said that inflation and rising fuel costs are further squeezing already thin margins.

For Barrett Willits, the 58-year-old owner of Barry’s Blind Factory in Huntsville, Alabama, the challenges are coming from multiple directions. His business, which has operated for 33 years and sells directly to consumers, has been hit by declining sales and rising supply-chain costs.

“Sales are down, market share is down. Our suppliers have been bought out by a hedge fund that also owns Heinz. They shut down American-staffed manufacturing outlets and shifted production to Mexico. So now our shipments travel thousands of miles to us when they used to travel 100 miles. Every time you turn around, there is a new price increase, a new shipping rate, a new surcharge,” he said.

View image in fullscreenGeoffrey, a plumber who employs two workers. Photograph: The GuardianFor Willits, the biggest concern is the impact rising costs are having on consumer demand.

Higher fuel costs are also taking a toll on businesses that rely on travel. Tina Spears, a 73-year-old pet sitter in Anchorage, Alaska, says recent increases in gas prices due to the US and Israel’s war on Iran have affected her business.

“I’m a cat sitter, and I drive to visit my clients. The gas prices exploded after this senseless war and my business has really been affected by the money I have to spend in order to get to the cats I visit. I raised my rates, which helps a little, but how high can I go when everything else is so expensive?” she said.

The impact of rising costs extends beyond transportation. For Roger, a 62-year-old bed-and-breakfast owner in Sevierville, Tennessee, he has to work extra hard to maintain quality while keeping prices stable for guests.

“While I continue to source local and high-quality ingredients for breakfasts, I have worked harder to minimize waste and to manage costs. I chose not to increase rates this year, and through implementation of yield management pricing, my average nightly rate has decreased slightly, but the increased occupancy has more than compensated,” he said.