The National Federation of Independent Business (NFIB) Research Center has released its quarterly Small Business Economic Trends survey, focusing on the construction, manufacturing, retail, and services sectors. The latest report shows an increase in optimism across all four industries compared to the previous quarter, reversing a downward trend seen earlier in the year.
Holly Wade, Executive Director of NFIB’s Research Center, commented on the findings: “Small business optimism increased in all four industry sectors, with optimism being the highest in manufacturing primarily due to increased expectations for better business conditions in the next six months. For small businesses overall, supply chains remain a challenge, with 64% reporting disruptions. Nonetheless, 65% of owners rated the overall health of their business as excellent or good.”
The survey was conducted in July and reported an overall Optimism Index of 100.3.
In the construction sector, optimism rose by 3.1 points from April to reach an index score of 104.0. This sector outpaced other industries and reported more positive expectations for future business conditions and earnings trends. Labor shortages remained a concern; over half of construction firms had unfilled job openings—higher than any other industry surveyed—and many cited labor quality as their main issue.
Manufacturing recorded the highest level of optimism among all sectors at 106.5—up by 6.7 points from last quarter and above the average for all firms surveyed. Manufacturing businesses were most likely to expect improved business conditions and higher real sales within six months.
Retailers saw their Optimism Index climb by 2.1 points to reach 96.0 but continued to be less optimistic than peers in other sectors and below historical averages for small businesses generally. While expectations for better conditions improved from earlier declines this year, retailers expressed ongoing dissatisfaction with inventory levels and reported weak earnings trends relative to other industries.
The services sector posted an Optimism Index of 99.7—a modest increase from April—closely aligning with broader small business sentiment measured across all firms surveyed.
The full report is available through NFIB’s website.
