The NFIB Research Center has released its latest quarterly Small Business Economic Trends survey, focusing on the construction, manufacturing, retail, and services industries. The report shows that small business optimism declined in all sectors except construction.
“Small business optimism fell in all reported industries except for construction, which was the most optimistic out of the four industries due to higher sales expectations and hiring plans,” said Holly Wade, Executive Director of NFIB’s Research Center. “Despite the diverging trends in optimism among industry sectors, 63% of small business owners rated the health of their business as excellent or good.”
The survey was conducted in October, with the overall Optimism Index at 98.2.
Across all industries, 60% of small business owners reported that supply chain disruptions impacted their operations to some degree—a decrease of four points from July. Retail and wholesale businesses experienced the highest rates of disruption at 77% and 76%, respectively. In contrast, finance (10%) and professional services (34%) were least affected.
Sixty-three percent of small business owners rated their business health as excellent or good, a two-point drop from July. This sentiment was strongest in finance and wholesale (both at 71%), while retail (54%) and agriculture (56%) reported lower ratings.
In industry-specific findings:
Construction saw its Optimism Index rise by 2.2 points to 105.5—the only sector above its historical average—driven by higher sales expectations and increased hiring plans. A net 18% expected higher real sales volume, up significantly from July. Half of construction firms had unfilled job openings, mostly for skilled workers. Thirty-five percent plan to hire in the next three months, with labor quality cited as a major challenge by nearly half.
Manufacturing’s Optimism Index was 100.1—second highest among the four industries—but dropped by 5.8 points from last quarter due to lower expectations for better conditions and real sales growth. Twenty-four percent plan to hire soon; however, this is slightly down from July.
Retail recorded an Optimism Index decline to 94.9—the lowest among surveyed sectors—with diminished expectations for better conditions and earnings driving this result. Only five percent plan new hires in coming months; inventory satisfaction improved but remains below average.
Services posted an Optimism Index decrease to 95.6, below its historical norm. All index components declined except hiring plans and credit expectations which held steady. Sales outlook worsened compared to previous quarters; capital expenditure intentions also dropped.
The full report can be accessed here.
