NEW YORK — Small business proprietors are increasingly anxious about the economic landscape as the presidential election approaches, prompting them to tighten their budgets based on recent survey findings.

The optimism index from the National Federation of Independent Business (NFIB) experienced a slight increase of 0.3 points in September, bringing it to 91.5. However, the uncertainty index surged by 11 points to reach 103, marking the highest level ever recorded.

Although inflation is beginning to subside and job growth remains strong enough to foster economic expansion, smaller businesses are finding it challenging to retain staff and manage rising rental and operational expenses compared to their larger counterparts.

“Small business owners are feeling more uncertain than ever,” remarked Bill Dunkelberg, Chief Economist at NFIB. “This growing uncertainty leads to hesitance among proprietors to invest in capital projects and inventory, particularly as inflation and financing costs continue to exert pressure on their profit margins.”

Due to this climate of uncertainty, small business owners are cutting back on expenditures. The percentage of owners reporting an increase in inventory dropped four points to a net negative 13%, the lowest level since June 2020. Additionally, only 51% of owners indicated they had made capital investments in the past six months, which is down five points from August and represents the lowest figure since July 2022.

On a more positive note, the job market shows some resilience. Thirty-four percent of owners indicated they had job openings that remained unfilled during this period, a decrease of six percentage points from August, which is the lowest since January 2021.

Despite indicators that inflation may be waning, it remains the foremost issue for small business owners. Twenty-three percent identified inflation as their single most pressing challenge in operating their business, particularly due to heightened input and labor costs.