Businesses say labor top concern

Inflation is no longer the biggest concern of small businesses in Ohio. Now, labor quality is the biggest issue.

The National Federation of Independent Business’ monthly Small Business Optimism Index fell again in April to 89, making it the 16th consecutive month below the 49-year average of 98, and business owners finding qualified job candidates is becoming more difficult.

“Small businesses are in a tough spot,” said Chris Ferruso, NFIB Ohio director. “Inflation and a lack of qualified job candidates are making it hard for them to provide the goods and services their customers need at prices they can afford.”

Labor quality topped the list of concerns in the survey with 24% of respondents saying it’s the most significant issue current. For the first time in months, inflation was second at 23%.

“Optimism is not improving on Main Street as more owners struggle with finding qualified workers for their open positions,” NFIB Chief Economist Bill Dunkelberg said. “Inflation remains a top concern for small businesses but is showing signs of easing.”

In response, 40% of business owners said they have raised pay rates, and another 21% plan to raise pay in the next three months.

The same survey showed the net percent of owners who expect sales to be higher fell 4 points from March to April to 19%.

The index release comes on the heels of U.S. Chamber of Commerce report saying Ohio had only 79 people available to fill every 100 jobs. That ratio, though, was better than most across the country.

That report, along the NFIB index echoed what the Ohio Chamber of Commerce continues to see across the state.

“The U.S. Chamber report published last week reflects exactly what we’ve been seeing here in Ohio — workforce is the greatest problem for businesses today. It continues to be the number one issue we hear from our members,” Ohio Chamber CEO Steve Stivers told The Center Square.

In November, the chamber published what it believes are key state regulatory, priority and policy changes aimed at influencing the labor shortage issue.

“Our Blueprint for Ohio’s Economic Future, the comprehensive vision we published in November, outlines key areas for economic growth and improvement for our state and creates a plan to address issues including the labor shortage,” Stivers said. “We believe that, to grow our state’s workforce, we must reduce barriers to employment, expand education and job training, grow Ohio’s population and recruit out-of-state workers, and modernize Ohio’s workforce for in-demand occupations now and into the future. The Ohio Chamber’s current policy priorities are centered around fulfilling these recommendations and will be for the next decade to come.”