The NFIB Small Business Optimism Index experienced a rise of 2.2 points in October, reaching 93.7. Despite this increase, the index has remained below the 50-year average of 98 for 34 consecutive months. The Uncertainty Index also rose by seven points to reach its highest recorded level at 110.
NFIB Chief Economist Bill Dunkelberg commented on the current situation, stating, "With the election over, small business owners will begin to feel less uncertain about future business conditions." He added that while optimism is increasing among small business owners, they continue to face significant economic challenges such as low sales and inflationary pressures.
Several key findings from the survey were highlighted:
- A net negative 20% of all owners reported higher nominal sales in the past three months, marking a decrease from September and representing the lowest reading since July 2020.
- Compensation increases were reported by a net 31% of owners, down slightly from September levels.
- Expectations for higher real sales volumes improved by five points to a net negative 4%, marking the highest reading this year.
- Job openings remain unfilled for many businesses, with a seasonally adjusted figure of 35% unable to fill positions in October.
Inflation remains a significant concern for small business owners, with 23% identifying it as their most pressing issue due to rising input and labor costs. Capital outlays have increased slightly over recent months, with more businesses planning investments in equipment and facilities.
The report indicates ongoing struggles with inventory management and pricing strategies amid fluctuating economic conditions. While some sectors like finance and retail are experiencing frequent price hikes, others are adjusting compensation plans cautiously.
Overall profit trends show mixed results; weaker sales and material costs are cited as reasons for lower profits by some businesses. Conversely, those reporting higher profits attribute them mainly to increased sales volumes.
Credit availability appears stable for most respondents; however, there is still some difficulty in obtaining loans compared to previous attempts. Financing concerns have decreased slightly but remain present among small business owners.
The NFIB Research Center continues its long-standing tradition of collecting data on small business economic trends through regular surveys conducted since the late twentieth century. The latest survey was completed in October 2024.
