Small Businesses Feeling the Squeeze

July 13, 2001 ( - Small business owners are feeling pressured, but while less than 10% are planning to hire new workers, the number of job cuts in June declined from a month ago.

According to the National Federation of Independent Business (NFIB), the number of job cuts dipped to an average of 0.1 employees per firm in June compared to 0.2 in May.

Some 15% reported reducing their workforce by an average of 3 employees per business, canceling out the 9% who cited an average increase of 3.5 workers.

And only 10% of the sample said they plan to hire more workers, the lowest percentage of respondents since 1994.

Pay rises were down in June, with only 29% of the sample reporting increases in labor compensation, five points below the record set in February.

Small Concerns

Not surprisingly, small businesses remain largely unruffled with regard to pay hikes, with only 6% of the sample citing labor costs as their primary concern.

According to the research, what the group is most concerned about is slowing sales growth, an area that recorded a 14% decline, a small business survey record,

  • with 37% of firms reporting lower sales in the most recent three-month period,
  • some 44% reported weaker profits, and
  • only 26% reporting higher sales.