Forty percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up 3 points from March’s lowest reading since January 2021. Thirty-four percent have openings for skilled workers (up 3 points) and 18 percent have openings for unskilled labor (up 4 points). The difficulty in filling open positions is particularly acute in the transportation, construction, and wholesale sectors. Job openings in construction were up 11 points from last month and over half of the firms (55%) have a job opening they can’t fill. Openings were the lowest in the agriculture and finance sectors. Owners’ plans to hire reversed trend, with a seasonally adjusted net 12 percent planning to create new jobs in the next three months, up 1 point from March’s lowest level since May 2020. Overall, 56 percent reported hiring or trying to hire in April, unchanged for the third consecutive month. Fifty-one percent (91 percent of those hiring or trying to hire) of owners reported few or no qualified applicants for the positions they were trying to fill (up 3 points). Twenty-eight percent of owners reported few qualified applicants for their open positions (down 1 point) and 23 percent reported none (up 4 points). Reports of labor quality as the single most important problem for business owners rose 1 point to 19 percent. However, labor quality as small business owners’ top problem has eased considerably over the last two quarters. Labor cost reported as the single most important problem for business owners increased 1 point to 11 percent, only 2 points below the highest reading of 13 percent reached in December 2021.

Fifty-six percent reported capital outlays in the last six months, unchanged from March. A recovery in investment is needed to support stronger productivity, but this is unlikely to occur while interest rates remain high, and more owners anticipate slower sales. Long term, the worker shortage has given firms an incentive to invest in labor saving technology. But, overall, capital spending is sluggish and not yet back to pre-pandemic levels. Of those making expenditures, 38 percent reported spending on new equipment (unchanged), 24 percent acquired vehicles (unchanged), and 16 percent improved or expanded facilities (down 1 point). Eleven percent spent money on new fixtures and furniture (up 1 point) and 6 percent acquired new buildings or land for expansion (up 1 point). Twenty-two percent (seasonally adjusted) plan capital outlays in the next few months, up 2 points from March.

The net percent of owners raising average selling prices fell 3 points from March to a net 25 percent seasonally adjusted. Twenty-two percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs), down 3 points from March. Unadjusted, 13 percent (unchanged) reported lower average selling prices and 41 percent (down 2 points) reported higher average prices. Price hikes were most frequent in the finance (54 percent higher, 7 percent lower), retail (49 percent higher, 8 percent lower), construction (48 percent higher, 7 percent lower), manufacturing (40 percent higher, 7 percent lower), and wholesale (40 percent higher, 10 percent lower) sectors. Seasonally adjusted, a net 26 percent plan price hikes in April (down 7 points). This is the lowest reading since April of last year.

Three percent of owners reported that all their borrowing needs were not satisfied, up 1 point from March. Twenty-eight percent reported all credit needs met (up 1 point) and 60 percent said they were not interested in a loan (up 1 point). A net 8 percent reported their last loan was harder to get than in previous attempts (unchanged). Four percent reported that financing was their top business problem in April (unchanged). A net 21 percent of owners reported paying a higher rate on their most recent loan, up 4 points from March. The average rate paid on short maturity loans was 9.3 percent, down by half a point from last month. Thirty-one percent of all owners reported borrowing on a regular basis, up 3 points from March.

Seasonally adjusted, a net 38 percent reported raising compensation, unchanged from March. A seasonally adjusted net 21 percent plan to raise compensation in the next three months, unchanged from March. Eleven percent cited labor costs as their top business problem, up 1 point from March and only 2 points below the highest reading of 13 percent reached in December 2021. Nineteen percent said that labor quality was their top business problem (up 1 point), remaining behind inflation as the number one issue. The frequency of reports of positive profit trends was a net negative 27 percent (seasonally adjusted), 2 points better than March, but still a very poor reading. Among owners reporting lower profits, 33 percent blamed weaker sales, 14 percent blamed the rise in the cost of materials, 13 percent cited usual seasonal change, and 12 percent cited labor costs. For owners reporting higher profits, 43 percent credited sales volumes, 26 percent cited usual seasonal change, and 11 percent cited higher selling prices.

A net negative 13 percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down 3 points from March. The net percent of owners expecting higher real sales volumes rose 6 points to a net negative 12 percent (seasonally adjusted). The net percent of owners reporting inventory gains rose 1 point to a net negative 6 percent. Not seasonally adjusted, 12 percent reported increases in stocks (unchanged) and 17 percent reported reductions (down 5 points). A net negative 4 percent (seasonally adjusted) of owners viewed current inventory stocks as “too low” (e.g. inventories are too large) in April, up 1 point from March. A net negative 6 percent (seasonally adjusted) of owners plan inventory investment in the coming months, up 1 point from March.