Falling gas prices dramatically lowered inflation concerns of small business owners in the New Year, according to a new survey. Instead, poor sales have replaced inflation as the biggest worry.
In July 2008, 20 percent of small business owners ranked inflation as their most important problem, according to a survey by the National Federation of Independent Business (NFIB), dropping down to 7 percent by December 2008.
"The rising concern of inflation was driven by the increased price of gasoline," said analyst Holly Wade. "It permeated through many aspects of cost for small businesses."
Chad Moutray, chief economist for the Small Business Administration, agreed, "A lot of small businesses were feeling squeezed. The costs of the intermediate goods that they were purchasing, as well as the general cost of operations, were going up pretty substantially, and yet they were not able to pass a lot of those costs on to the consumer because of competition."
With the economy in the tank, poor sales are now the dominant concern for 27 percent of those surveyed. That's the highest number on record for the monthly survey since its beginning in 1986.
"There's an overall sense of anxiousness on the part of the consumer," Moutray said. "Small business owners, like their bigger business counterparts, are very anxious about the economy right now."