Buckeye Reporter

The National Federation of Independent Business (NFIB) Small Business Optimism Index increased by 0.5 points in August, reaching 100.8. This level is nearly three points higher than the index's 52-year average of 98. Of the ten components measured by the index, four saw increases, four decreased, and two remained unchanged. The most significant contribution to the rise came from a greater number of business owners expecting real sales to be higher.

The Uncertainty Index fell by four points to 93 but still stayed above its historical average. The reduction was mainly due to less uncertainty about financing expectations and planned capital expenditures.

Jared Weiser, NFIB Ohio State Director, commented on the findings: “Small employers are feeling more optimistic following the federal Small Business Deduction tax win in addition to stronger sales expectations and improved earnings. The biggest concern for small business owners continues to be the labor market and finding qualified employees for their open positions.”

Survey results showed that in August, 14% of respondents rated their business health as excellent (up one point), while 54% described it as good (up two points). Twenty-seven percent reported fair health (down four points), and 4% said poor (unchanged).

Labor quality remains a key issue for small businesses, with 21% naming it as their top problem—unchanged from July. Job openings that could not be filled were reported by 32% of owners (seasonally adjusted), down one point from July; this is the lowest since July 2020.

Expectations for higher real sales volumes rose six points from July to a net 12%, which had the largest impact on optimism gains. Inventory assessments also shifted slightly, with a net zero percent viewing stocks as too low in August—a three-point increase over July.

Owners raising average selling prices dropped three points from July to a net 21%, marking this year’s lowest reading so far. Reports of positive profit trends improved by three points but remained negative at net -19%. This is still the best result since March 2023.

Short-term loan rates averaged at 8.1%, down by 0.6 percentage points compared to July—the lowest rate since May last year—and regular borrowing among owners declined two percentage points to reach levels last seen in November 2021.

Hiring challenges persist across industries such as construction, manufacturing, and transportation; almost half of construction businesses struggled with unfilled job openings despite some improvement compared with previous months and last year’s figures.

A seasonally adjusted net of 15% plan new job creation within three months—an upward trend for three consecutive months but historically low overall. Among those hiring or attempting to hire during August, most cited few or no qualified applicants: specifically, only twenty-six percent found few suitable candidates (down three points), while seventeen percent found none at all (down two).

Compensation adjustments continue as well; seasonally adjusted figures show a net increase in wage raises (+2 points from July) and future plans (+3 points). Capital outlays rose slightly but remain historically subdued; most investments focused on equipment purchases or facility improvements rather than expansion into new buildings or land acquisition.

Sales data indicated that nominal sales have not improved over recent months—with nine percent reporting higher sales against previous periods—and inventory investment plans held steady month-over-month.

Supply chain disruptions affected just over half of respondents but showed signs of easing: only three percent reported significant impacts compared with earlier periods.

Price increases may slow further as fewer owners expect to raise prices soon—a trend reflected both in actual pricing decisions and inflation concerns holding steady among eleven percent who see it as their main operational challenge.

Profitability issues stemmed mostly from weaker sales or rising input costs; meanwhile, only four percent cited financing difficulties—consistent with stable lending conditions despite marginally tighter access or increased rates for some borrowers.

Looking ahead, fewer owners expect better business conditions (-2 points versus July), and there was also a slight dip in those considering expansion opportunities now favorable (-2).

Taxes continue as a prominent concern after labor quality issues—seventeen percent ranked taxes highest after employment-related challenges—and government regulation concerns edged up modestly.

NFIB has tracked these economic trends through regular surveys since the early seventies; data is drawn randomly each month from its membership base across sectors nationwide.