Florida small businesses still struggling with inflation despite rule changes

While the new law will provide some relief, inflation remains the most pressing issue for Florida small businesses.

Even though the new law will provide some relief, inflation remains the most pressing issue for Florida small businesses, according to the latest data from the National Federation of Independent Businesses (NFIB).

The NFIB Small Business Optimism Index hit its highest reading of the year in June, at 91.5, up one point from May. However, it was the 30th consecutive month below its historical average of 98. Twenty-one percent of small business owners cited inflation as their top concern, down slightly from the previous month but still a significant concern. Rising material and labor costs have prompted many businesses to raise prices. The NFIB report noted a net 27 percent of owners raised their average selling prices in June, up two points from May.

“Inflation affects everyone – from manufacturers to retailers and consumers” Bill HerrleNFIB State Executive Director. “It increases the cost of everything from raw materials to labor.”

House Bill 433, signed by the Governor. Ron DeSantis in April, seeks to standardize employment laws statewide, barring local governments from setting their own minimum wage or employee benefits for private employers. While lawmakers say the measure will stem inflationary gains, Herrle remains skeptical.

“Small businesses will see some relief from House Bill 433, which prevents local governments from creating a patchwork of minimum wage mandates, but market forces continue to drive up prices and wages across the state and country,” he said.

Adding to concerns about rising costs, the broader economic environment remains challenging for small businesses, according to the NFIB. ​​The group’s report found that 37 percent of small-business owners had job openings they couldn’t fill, down five points from May. In addition, a net 22 percent plan to raise wages in the coming months amid the ongoing struggle to attract and retain skilled workers.

Capital expenditures also fell, with only 52 percent of owners reporting spending in the past six months, the lowest rate since August 2022. Of those who incurred expenditure, 35 percent reported spending on new equipment, 22 percent acquired vehicles, and 14 percent improved or expanded facilities. Ten percent spent money on new equipment and furniture, and 5 percent acquired new buildings or land for expansion.

“Main Street remains bearish on the economy for the rest of the year,” NFIB chief economist said Bill Dunkelberg noted. “Rising compensation costs have pushed up prices around the world. Meanwhile, small business owners see no relief from inflation as they brace for months of uncertainty.”