The NFIB Research Center’s quarterly Small Business Economic Trends survey, released in August, indicates a slight increase in small business optimism across several key industries. The survey, conducted in July, shows an overall Optimism Index of 93.7, reflecting a modest uptick in confidence despite ongoing challenges.
The construction industry leads with an Optimism Index of 98.6, marking a notable rise of 6.3 points from the previous quarter and surpassing the overall index. This sector also reports the highest percentage of unfilled job openings at 53%, although this figure has slightly decreased from April. The demand for skilled workers remains high, with 51% of job openings in this category. However, 56% of construction firms still face a shortage of qualified applicants. Despite a decline in firms raising selling prices and a drop in earnings trends, hiring intentions remain strong, with 23% planning to expand their workforce in the coming months.
In manufacturing, the Optimism Index reached 92.9, a 3.4-point increase from April but slightly below the overall index. The sector’s expectations for strong future sales improved marginally, though it remains the lowest among the reported industries. Manufacturing firms are more optimistic about economic improvement, with a 37-point increase in those expecting better conditions.
The retail sector, with an Optimism Index of 91.3, shows the lowest confidence among the four industries surveyed. Despite a 2.3-point increase from April, retailers are less optimistic about future sales, although expectations have improved slightly. Retailers continue to report low inventory levels and are not planning significant increases in stock over the next few months.
The services sector’s Optimism Index stands at 93.8, a modest rise of 1.3 points from April. Despite a net negative 11% of service sector owners expecting economic improvement, hiring plans are slightly more robust than the overall average, with 16% of firms planning to expand their staff.
Holly Wade, Executive Director of NFIB’s Research Center, notes that while small business optimism is improving, hiring difficulties, low sales, and rising costs persist across all industries.
