A measure of optimism among small business owners has edged down on increasingly pessimistic expectations for the economy.

 “Small business owners remain very pessimistic about the second half of the year as supply chain disruptions, inflation and the labor shortage are not easing,” said Bill Dunkelberg, chief economist of the National Federation of Independent Business.

The NFIB reported its Small Business Optimism Index slipped a tenth of a point to 93.1 in May. The index remained below its historical average of 98 for a fifth consecutive month.

The small business advocacy group bases the index on the results of monthly surveys of members, most of them small business owners. For May, five of the 10 components of the index advanced, four retreated and one remained unchanged.

The portion of those who responded to the survey upon which the May index was based who expect the economy to improve over the next six months fell four points from April. At a net negative 54 percent, the lowest level ever, more respondents anticipated worsening conditions.

A net 6 percent said they consider now a good time to expand, up two points. A net 25 percent reported plans for capital outlays, down two points.

A net 26 percent of survey respondents said they plan to increase staffing, up six points. But a net 51 percent reported unfilled job openings, up four points. Asked to identify their most important business problem, 23 percent cited quality of labor and 12 percent cost of labor. 

Inflation ranked as the most pressing problem of all with 28 percent of the response. A net 72 percent of respondents reported raising average sales prices, matching the record high reading.

Meanwhile, 39 percent of respondents said supply chain disruptions had significant effects on their businesses. Another 31 percent reported moderate effects and 22 percent mild effects.

The proportion of respondents who said they expected higher sales volume fell three points. At a net negative 15 percent, more anticipated lower volume.

The share of those who reported higher earnings fell seven points to a net negative 24 percent. Among those who reported lower earnings, 34 percent blamed higher materials costs and 25 percent cited lower sales.

A net 1 percent of respondents reported plans to increase inventories, unchanged from April. A net 8 percent said existing inventories were too low, up two points.