The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index dropped by 0.6 points in October to 98.2, though it remains above the historical average of 98 for the past 52 years. The Uncertainty Index saw a notable decrease, falling by 12 points from September to reach 88, marking the lowest level so far this year.
Jared Weiser, NFIB Ohio State Director, commented on the report: “While optimism among the nation’s small businesses dipped in October, it’s a positive sign that owners are feeling less uncertain about the future of their businesses. Labor quality remains the top challenge for small employers, and we’re grateful the Ohio Legislature continues to prioritize easing this burden for Main Street.”
The October report also marks the launch of a new podcast from NFIB’s Research Center titled “Small Business by the Numbers.” Hosted by Holly Wade, Executive Director of the NFIB Research Center, the podcast will discuss data and economic conditions affecting small businesses across the country.
Key findings from October indicate that labor quality is an ongoing concern for small business owners. Twenty-seven percent identified it as their most significant problem—an increase of nine points since September and reaching levels not seen since November 2021. This figure is significantly higher than those citing taxes or other issues.
Job openings remain steady; thirty-two percent of owners reported positions they could not fill, unchanged from September and consistent with figures last seen in December 2020. Of those attempting to hire, eighty-eight percent said there were few or no qualified applicants. Hiring plans have softened slightly with a net fifteen percent planning to create new jobs over the next three months—a one-point decline after several months of growth.
Reports show that labor costs as a primary concern decreased three points to eight percent. Meanwhile, twenty-six percent said they raised compensation during October (down five points), while nineteen percent plan further increases in coming months.
Profitability has declined as well. The frequency of positive profit reports fell nine points to a net negative twenty-five percent—the biggest contributor to lower optimism this month. Among those reporting lower profits, weaker sales were cited most often.
In terms of pricing trends, fewer owners increased prices compared to previous months; twenty-one percent reported raising selling prices (down three points). However, planned price hikes remain above historical averages at thirty percent over the next quarter.
Capital spending activity slowed modestly; fifty-five percent made capital outlays in recent months—one point lower than September—with investments mainly focused on equipment and vehicles.
Supply chain disruptions continue but have eased somewhat; sixty percent reported some impact in October—a four-point drop from September.
Owners’ views on their business health have shifted slightly more negative: twelve percent described their business as excellent (up one point), fifty-one percent as good (down six), thirty-three percent as fair (up six), and four percent as poor (unchanged).
Expectations for better business conditions declined three points but remain above long-term averages. Thirteen percent believe now is a good time to expand operations—still low compared to periods of broader economic expansion.
Other challenges such as inflation (twelve percent), poor sales (ten percent), insurance costs (eight percent), financing issues (two percent), and competition from larger firms (five percent) showed little change from prior months.
NFIB has collected these economic trend data through regular surveys since 1973 and monthly since 1986. Respondents are randomly selected from its membership base.
