Small businesses aren’t feeling especially positive about their future, as labor and other costs weigh on their bottom line, a new survey found.

Sentiment fell 0.9% in March to its lowest level since December 2012, according to the newest small business optimism index from the National Federation of Independent Business.

What You Need To Know

  • Small business owner optimism fell to an 11-year low in March

  • Inflation is the top concern, according to the newest small business optimism index from the National Federation of Independent Business

  • More than a third of surveyed businesses reported job openings they could not fill

  • 43% of owners said they raised their average selling prices

“Inflation has once again been reported as the top business problem on Main Street, and the labor market has only eased slightly,” NFIB Chief Economist Bill Dunkelberg said in a statement. Business owners are managing “numerous economic headwinds," he said.

About a quarter of business owners in the survey said inflation is their single most important operating problem. The Consumer Price Index rose to a higher-than-expected 3.2% in February, according to the Bureau of Labor Statistics’ most recent reading. More small business owners cited the higher costs of labor and inputs needed to run their companies for their decreasing optimism.

More than a third (37%) of surveyed businesses reported job openings they could not fill; 38% said they raised worker wages in March. Just 11% plan to create new jobs in the next three months. The number of business owners who said quality of labor was their top operating problem increased 2 percentage points to 18%.

To help offset increased costs, 43% of owners said they raised their average selling prices — a 7-point increase compared with February. Finance, retail, construction and wholesale businesses reported the most price hikes. Fewer businesses are planning to make capital outlays.

The association of small U.S. businesses that works to promote and protect their ability to operate and grow has conducted monthly surveys since 1986. The most recent poll took place in March.