(Reuters) – U.S. Small Business Confidence fell to its lowest level in a whole year in February, as a result of an inflation wave that has forced a record number of establishments raise prices and denting the outlook for the economy. A survey was released Tuesday.

According to the National Federation of Independent Business, its Small Business Optimism Index fell 1.4 points last month to 95.7 from 97.1 in January. The reading was the lowest since February 2021.

Over 25% of companies cited inflation, the largest number since 1981. A record 68% stated that they are pushing for price rises. However, higher prices didn’t translate into profit increases in most cases. Businesses reported a greater share of lower profits and 60% of them complained about lost sales.

“Inflation continues to be a problem on Main Street, leading more owners to raise selling prices again in February,” said NFIB Chief Economist Bill Dunkelberg. “Supply chain disruptions and labor shortages also remain problems, leading to lower earnings and sales for many.”

As the economy recovers from the two-year long, but very deep recession caused by COVID-19, supply chain problems have been an ongoing problem. Inflation has risen to an all-time high of four decades, with demand for goods and services exceeding supply.

With Russia’s invasion and subsequent rise in fuel prices, the inflation outlook is worsening in March. It also hurt the hopes of Federal Reserve policymakers who are hoping for an end to rising price pressures. Tuesday’s survey released did not mention the conflict, which began in February.

Although the Fed will likely raise interest rates by at least 25% next week to curb high inflation, the conflict in Eastern Europe is raising questions about how fast it can remove the unusual accommodation that was put in place at the outbreak of coronavirus in 2002.