The percentage of small business owners expecting better business conditions over the next six months improved by 10 points from June to a net negative 30%, according to a new National Federation of Independent Business study.
“Consumer demands are growing," said Bill Herrle, executive director of Florida's National Federation of Independent Business. "In COVID, people learned they can get virtually anything delivered to their doorstep and that has created a lot of opportunity for a lot of innovative small business owners.”
NFIB’s Small Business Economic Trends report, also known as the monthly Optimism Index, determined that 40% of business owners reported job openings that were hard to fill, which is unchanged from June.
“Within the service sector, it hits hospitality additionally hard,” Herrle told the Florida Record. “Given that Florida is so services intensive, hospitality intensive, and tourism intensive, it makes those numbers more concerning than in other states.”
One factor contributing to the labor shortage is a lack of nearby affordable housing, according to the NFIB data.
“There's a big mismatch around the tourism industry in Central Florida where there’s a huge affordable housing shortage,” Herrle said in an interview. “You have a lot of jobs where the bulk of the workforce available for that is 20 miles away and that just makes another huge barrier to solving labor problems.”
The study further found that 21 percent of business owners reported inflation as their single most important problem in operating their business.
The current rate of U.S. inflation is 3.18% compared to 2.97% last month and 8.52% last year, according to YCharts.
However, in Florida, the inflation rate is much higher.
As previously reported by NBC, the Consumer Price Index found that in the Miami-Fort Lauderdale-West Palm Beach metro area, inflation reached 9% and in the Tampa-Clearwater metro area, inflation hit 7.3%.
“The biggest hidden costs of inflation, a tight labor market and wage inflation for small business owners is the loss of entrepreneurial opportunity,” Herrle said. “I'm hearing from a lot of business owners that they can’t have lunch because they are working a shift. I don't usually hear that from business owners of them being on the front line.”
Finally, a net 38% reported having to increase wages and 21% plan to raise compensation in the next three months, down one point from June.
“The most pernicious inflationary pressure is wage inflation, which includes attracting good workers for the wages they can afford in their business model,” Herrle added.