Detroit City Wire

Small businesses faced a challenging sales environment in October, according to recent data. Only 20% of small business owners reported higher sales over the past three months, marking a decline of three points from September and reaching the lowest level in four years. However, expectations for future sales have increased by five points to -4%, the highest level this year.

The labor market remains tight, with 35% of small businesses reporting job openings they could not fill, an increase of one point from September. Compensation increases were noted by 31% of small business owners in October, down one point from September and the lowest level in three years.

Inflation continues to be a significant concern for 23% of small business owners, unchanged from September and still the most cited issue. Meanwhile, concerns about labor quality rose by three points to 20%.

Price adjustments were also observed; 21% of small businesses raised their prices in August, slightly lower than September's figures. Looking ahead, 26% plan to raise prices in the next three months.

Capital spending shows signs of growth with 54% reporting capital outlays over the last six months and 22% planning purchases in the upcoming quarter. Credit conditions are expected to improve slightly as -6% anticipate better conditions soon.

A majority (64%) are not interested in loans currently, while regular borrowing is reported by 25%, a slight decrease from September. Financing was identified as the top problem by only 3%, down one point from September.

The National Federation of Independent Business (NFIB) Small Business Optimism Index released these findings on November 12, 2024.

In terms of sales performance for October compared to previous periods, month-over-month sales at small businesses increased by 3.7%, following a stagnant September. Year-over-year comparisons show a rise of 7.1%. Notably growing retail categories include General Merchandise with an increase of 11.4%, Food & Beverage at 8.4%, and Furniture at 7.8%.

Food Services and Restaurants saw modest growth with a month-over-month increase of 2% and a year-over-year rise of nearly six percent despite average ticket sizes declining by nearly two percent compared to last year.

Service-based small businesses experienced growth as well; they expanded by four percent since September and grew more than seven percent compared to October last year.

These insights were published on November 2, 2024, as part of the Fiserv Small Business Index report.