Health care costs, inflation continue to harm small businesses, NFIB says

The National Federation of Independent Business (NFIB) has released a pair reports that cast light on the continuing difficulties that “mom-and-pop” enterprises are having with staying open and keeping people employed.

The NFIB’s Small Business Problems & Priorities report, which is produced every four years by the organization, ranks the 75 issues, or, more accurately, struggles, that small-business owners encounter in opening an enterprise and keeping it running. Also released was the NFIB monthly Small Business Economic Trends report. Both listed inflation as a major concern, and the Problems & Priorities report also showed the cost of health care holding its first-place rank for the 38th consecutive year.

“For the last four years, small-business owners have struggled with historic inflation, tax pressures at all levels of government and uncertainty of what’s going to happen next,” said Holly Wade, executive director of the NFIB Research Center. “This survey helps the public understand the issues affecting the small-business sector.”

Highlights from NFIB’s latest Small Business Problems & Priorities report, published quadrennially since 1982, include:

• Unchanged since 1986, the cost of health insurance remains the No. 1 chronic issue for small-business owners.
• The cost of supplies/inventories moved up in importance from ranking 12th in 2020 to its current second-place ranking, a direct result of historic inflation over the past two years.
• Interest rates topped the list by rising 43 positions from a rank of 56th in 2020 to 13th in 2024.

Highlights from NFIB’s latest Small Business Economic Trends report, released the second Tuesday of every month, include:

• Inflation remains the top issue among small-business owners, with 25 percent reporting it as their single most important problem in operating their business, up four points from June.
• Thirty-eight percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up one point from June.
• Seasonally adjusted, a net 33 percent reported raising compensation in July, down five points from June and the lowest reading since April 2021.

“Cost pressures, especially labor costs, continue to plague small-business operations, impacting their bottom line,” said NFIB Chief Economist Bill Dunkelberg. “Owners are heading towards unpredictable months ahead, not knowing how future economic conditions or government policies will impact them.”

NFIB research polls NFIB-member, small-business owners and is not broken down by state. The average NFIB-member small business has between five and nine employees.

More Utah small-business news can be accessed at www.nfib.com/utah.