More than 1 in 5 small business owners nationally say inflation is the most important problem they encounter in running their companies, according to a monthly survey conducted by the National Federation of Independent Business.  

The newest survey of NFIB members, conducted in December, showed that the NFIB Small Business Optimism Index increased slightly from November to 98.9, a 0.5-point increase. Of the small business owners surveyed, 22% cited inflation as their biggest problem — a 20-point increase from a year earlier, and the highest level of inflation concern since late 1981. The nonprofit national association has conducted quarterly economic trend surveys since 1973 and monthly surveys since 1986.

“Small businesses unfortunately saw a disappointing December jobs report, with staffing issues continuing to impact their ability to be fully productive,” NFIB Chief Economist Bill Dunkelberg said in the report. “Inflation is at the highest level since the 1980s and is having an overwhelming impact on owners’ ability to manage their businesses.”

Some other key findings:

– A net 48% (seasonally adjusted) of owners reported raising compensation, up 4 points from November and a 48-year record high reading.

– A net 32% plan to raise compensation in the next three months. Thirteen percent cited labor costs as their top business problem, up 3 points and also a 48-year high, and 25% said that labor quality was their top business problem.

– Fifty-seven percent of owners reported making capital outlays in the last six months, up 2 points from November. Of those making expenditures, 41% reported spending on new equipment, 25% acquired new vehicles, and 19% improved or expanded facilities.

– Six percent of owners acquired new buildings or land for expansion and 13% spent money for new fixtures and furniture. Twenty-nine percent plan capital outlays in the next few months, up 2 points from November and 2 points higher than the 48-year average.

– Thirty-six percent of owners report that supply chain disruptions have had a significant impact on their business. Another 30% report a moderate impact and 21% report a mild impact. Only 11% report no impact from recent supply chain disruptions.