News

The NFIB Small Business Optimism Index fell 2.5 points in August to 91.2, erasing July’s gain. This marked the 32nd consecutive month below the 50-year average of 98. Although price increases have slowed in recent months, inflation remained the top concern for small business owners, with 24% identifying it as their primary issue. Small business owners faced ongoing challenges, with sales expectations plummeting and cost pressures remaining.

In addition to inflation, labor quality continues to be a top issue for small businesses. In August, 40% of small business owners reported jobs they could not fill, which was particularly acute in transportation, construction and manufacturing.

A net 25% of small business owners plan price hikes in August. Price hikes occurred most frequently in finance but were also prevalent in manufacturing (33% higher, 7% lower). A net 33% of small business owners reported raising compensation, unchanged from July. Capital expenditures saw a modest increase, with 56% of small business owners making investments in the past six months. Profitability remained under pressure, mainly due to weaker sales.

Small business owner optimism remained unchanged and well below the 50-year average. Manufacturing weakness appears to be spreading to other sectors, such as housing and construction. The outlooks for sales and business conditions are at historically low levels and continue to get worse.