The NFIB Small Business Optimism Index reached its highest reading of the year in June at 91.5, a one-point increase from May. The index last surpassed this figure in December 2023 when it hit 91.9. Despite this uptick, the index remains below the historical average of 98 for the 30th consecutive month. Inflation continues to be the primary concern for small businesses, with 21% of owners identifying it as their most significant operational challenge, down one point from May.
"Main Street remains pessimistic about the economy for the balance of the year," said NFIB Chief Economist Bill Dunkelberg. "Increasing compensation costs have led to higher prices all around. Meanwhile, no relief from inflation is in sight for small business owners as they prepare for the uncertain months ahead."
Key findings from the survey include:
- Seasonally adjusted, a net 22% plan to raise compensation in the next three months, up four points from May.
- A net negative 2% (seasonally adjusted) of owners viewed current inventory stocks as "too low" in June, up six points from May’s lowest reading since October 1981.
- A net negative 2% (seasonally adjusted) plan inventory investment in the coming months, up four points from May.
- Fifty-two percent reported capital outlays in the last six months, down six points from May and marking the lowest reading since August 2022.
- Four percent of owners reported that all their borrowing needs were not satisfied, up one point from May and reaching the highest level since August 2022.
According to NFIB's monthly jobs report, a seasonally adjusted 37% of small business owners reported job openings they could not fill during their current period, down five points from May. Among those hiring or attempting to hire in June, 85% reported few or no qualified applicants for available positions.
Fifty-two percent of owners reported capital outlays over the past six months—a decrease of six points compared to May and the lowest figure since August 2022. Of those making expenditures:
- 35% invested in new equipment,
- 22% acquired vehicles,
- 14% improved or expanded facilities,
- Ten percent spent on new fixtures and furniture,
- Five percent purchased new buildings or land for expansion.
Twenty-three percent (seasonally adjusted) plan capital outlays in the next six months, unchanged from May.
A net negative 12% of all owners (seasonally adjusted) reported higher nominal sales over the past three months. The net percentage expecting higher real sales volumes remained at a net negative 13%.
The net percentage reporting inventory gains rose by four points to a net negative three percent. Not seasonally adjusted:
- Seventeen percent reported stock increases,
- Sixteen percent reported reductions.
The percentage raising average selling prices increased by two points from May to a net seasonally adjusted rate of twenty-seven percent. Twenty-one percent identified inflation as their top operational problem; unadjusted figures show twelve percent reporting lower average selling prices and forty-one percent reporting higher prices.
Price hikes were most frequent in sectors such as construction (55% higher), retail (49%), wholesale (46%), finance (38%), and services (37%). Seasonally adjusted, a net twenty-six percent planned price hikes in June.
Seasonally adjusted data showed that thirty-eight percent raised compensation—up one point from May—and twenty-two percent plan further raises within three months—a four-point increase. Eleven percent cited labor costs as their top business problem—up one point—and nineteen percent cited labor quality concerns.
The frequency of positive profit trend reports was a net negative twenty-nine percent—one point better than May but still notably poor:
- Among those reporting lower profits:
- Thirty-four percent blamed weaker sales,
- Seventeen cited material cost rises,
- Twelve mentioned labor costs,
- Nine noted lower selling prices.
For those with higher profits:
- Thirty-seven credited sales volumes,
- Twenty-seven cited usual seasonal changes,
- Twenty referenced higher selling prices.
Four percent stated that financing was their top issue—down two points from May—and seven-percent indicated difficulty obtaining loans compared to previous attempts.
The NFIB Research Center has been collecting Small Business Economic Trends data through quarterly surveys since late 1973 and monthly surveys since 1986. Respondents are randomly selected from NFIB's membership base. The report is published on the second Tuesday each month based on surveys conducted during that month.
