(The Center Square) — Nearly half of small business owners are not willing to hire because of labor costs and “skyrocketing inflation,” a newly released small business report shows.
The small business network Alignable released its July Hiring report which found that “45% of small businesses (SMBs) are halting their hiring, largely because they say they can’t afford to add staff.”
“This represents a significant hiring shift, and is largely a reaction to mounting labor costs, skyrocketing inflation, fears of a recession, and rising interest rates,” the group said.
The report found 4% of small businesses are planning to lay off workers and that “some employers noted that they have learned to live without the extra staff, making other changes and/or working longer hours themselves.”
Alignable’s survey found the sentiment varied across industries, with 66% of gym owners reporting a hiring freeze.
“The same goes for 63% in real estate, 58% in transportation, 55% in the automotive sector, and 55% of retailers.”
Others are reducing staff, including 5% in real estate and the automotive industry as well as 3% in retail. The hiring freeze also varies from state to state.
“The top 5 states most affected by the hiring slowdown are NJ (64%), FL (63%), TX (52%), VA (52%), and CA (49%),” Alignable said. “From 3% to 14% of all SMB owners in these states say they’ll be forced to lay off staff, as well.”
The survey comes after the latest U.S. Bureau of Labor Statistics data showed consumer prices rose 9.1% in the past year, the highest in more than 40 years. Meanwhile, the BLS producer price index rose nearly the highest ever at 11.3% in the previous twelve months.