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Small business owners pessimistic about economy
It's a three-pronged problem for businesses with a labor shortage, the need to raise wages and inflation all playing a factor.
DALLAS - It is a new year, but it comes with old worries for small businesses in Texas.
An economic report by the National Federation of Independent Business says owners are pessimistic about economic prospects this year.
It's a three-pronged problem for businesses with a labor shortage, the need to raise wages and inflation all playing a factor.
H.J. Russell is in the middle of several construction projects in Dallas, but their problem is the same as many other small businesses, finding workers.
"There's a little bit of a delay sometimes whenever we're trying to fill some positions for the skilled workers and what not with our trade partners as well," said Melissa Smith-Williams, the project manager for H.J. Russell.
Jeff Burdett, the state director of the National Federation of Independent Business, says it is a tight labor market out there.
"39 percent of owners in this recent report that reported that they could not fill openings that they have and this has remained fairly consistent in 2023, and we're concerned that it's going to continue into 2024 as well," Burdett said.
He says small business is not excited about the economy.
"Small business owners aren't too optimistic that the economy is going to be improving any time soon. Only 14 percent of our small business owners plan to create jobs in the next three months, which is down two points from December, but also is the lowest since May 2020, in the height of the pandemic," Burdett explained.
The NFIB report shows 29 percent of business owners plan to raise wages to keep workers and recruit new ones.
"We have to come up with different or creative compensation packages just to make sure that we are meeting the demands within the marketplace. We are able to successfully do that, but it is something that we are faced with," said Smith-Williams.
We've heard a lot from the Biden Administration and Federal Reserve about inflation coming down from historic highs.
READ MORE: Federal Reserve on track to cut rates this year: What it means for you
That, according to Burdett, is still the biggest battle facing businesses.
"It's cost of labor, cost of rent, costs of goods and services, but also health insurance costs and other insurance costs. You've got property, you've got vehicles, you've got workers comp and all of those things go together. It really is a difficult time on small business owners," said Burdett.
If business costs climb it means a smaller profit margin for companies, but it also means some of that higher cost will be passed on to customers.