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What factors contribute to businesses’ pessimism towards the economy?


Sep 12, 2023

On Monday, we discussed the positive outlook of consumers, but now let’s shift our focus to how businesses are feeling. According to the National Federation of Independent Business’ Small Business Optimism Index, business owners have been scoring their outlook below average for the past 20 months. This indicates a mostly pessimistic view of the future among business owners.

One business owner, Judy Herrell, is currently on the hunt for suppliers who make crushed sandwich cookies. She has tried numerous distributors without success and has had to drive nearly two hours each way to pick up cookies from the nearest producer due to supply chain issues. Additionally, the cost of black raspberries, a key ingredient in many of her signature flavors, has skyrocketed from around $2,000 a few years ago to over $6,000 this year. The rising prices of ingredients such as milk have also become a concern for her business.

The differing experiences of consumers and businesses regarding inflation can be attributed to the specific goods they require. Businesses are unable to pivot as quickly as consumers and have to deal with higher labor costs, which make up a significant portion of their expenses. Hiring has also become a challenge, as many job candidates are unable to find reliable childcare. This has resulted in business owners having to take on additional responsibilities and work longer hours.

Despite these challenges, some businesses are experiencing growth and gaining new accounts. However, there is a slower turnaround in getting products out and getting paid, which adds to the burdens faced by business owners. Erin Calvo-Bacci, who owns a candy company, acknowledges the progress her business is making but expresses frustration over the ongoing struggles caused by the pandemic. She expected things to become easier by now.

In conclusion, businesses are currently dealing with various challenges ranging from supply chain issues to rising costs and labor shortages. Despite these difficulties, some are still experiencing growth, but the overall sentiment among business owners remains mostly pessimistic.

By Editor

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