A measure of confidence among small business owners has declined on less upbeat expectations for sales, hiring and other factors.

The Federation of Independent Business reported its Small Business Optimism Index fell eight-tenths of a point to 90.1 in March. The index has remained below its historical average of 98 for 15 consecutive months.

“Small business owners are cynical about future economic conditions,” said Bill Dunkelberg, chief economist of the NFIB. “Hiring plans fell to their lowest level since May 2020, but strong consumer spending has kept Main Street alive and supported strong labor demand.”

The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group, most of them small business owners.

For March, six of 10 components of the index retreated, three advanced and one held steady from February.

The proportion of NFIB members responding to the survey upon which the March index was based survey who expect the economy to improve remained unchanged. But at a net negative 47 percent, more respondents anticipated worsening conditions.

A net 20 percent reported plans for capital outlays, down a point from February. A net 2 percent said they consider now a good time to expand, down four points.

A net 15 percent reported plans to increase staffing, down two points. A net 43 percent reported hard-to-fill job openings, down four points. While 26 percent reported few qualified applicants for open positions, 27 percent reported they were none.

The share of survey respondents who expected increased sales fell six points. At a net negative 15 percent, more expected decreased sales.

Expectations for profits increased five points. But at a net negative 18 percent, more respondents anticipated lower profits.

Among those reporting higher profits, 48 percent attributed the gain to increased sales, 21 percent cited higher prices and 5 percent credit lower labor costs. Among those reporting lower profits,
31 percent blamed weaker sales and 23 percent cited rising material costs.

The proportion of respondents planning to increase inventories fell three points to a net negative 4 percent. A net 1 percent said inventories were too high, up five points

Asked to identify their single most important business problem,  24 percent cited inflation. A net 37 percent of respondents reported raising average selling prices. Price hikes were most frequent in the wholesale, retail and construction sectors. Quality of labor came in a close second as the most important problem.