Show-Me State Times

The National Federation of Independent Business (NFIB) released its Small Business Optimism Index for June, which saw a slight decrease of 0.2 points to 98.6. This figure remains marginally above the long-term average of 98 over the past 51 years. The report highlighted an increase in small business owners reporting excess inventories as a significant factor contributing to this decline.

Bill Dunkelberg, NFIB Chief Economist, noted that "small business optimism remained steady in June while uncertainty fell," adding that taxes continue to be a major concern for businesses on Main Street.

In Missouri, NFIB State Director Brad Jones commented on how local small business owners are managing current economic conditions. "The national survey reflects what we’re hearing from our members here in Missouri," Jones said. He also mentioned that recent legislative changes could positively impact businesses, stating that "the passage and signature of the One Big Beautiful Bill Act last week...will no doubt encourage Main Street as they navigate hiring challenges."

Key findings from the survey indicate various trends among small businesses:

- A net negative 5% of owners considered their inventory levels too low in June, marking a six-point drop from May.

- Expectations for better business conditions fell by three points to a net 22%, though this remains historically positive.

- There was a decrease in expectations for higher real sales volumes by three points to a net 7%.

- Plans for capital outlays over the next six months dropped slightly to 21%.

Labor quality continues to be an issue, with 16% of owners citing it as their primary problem—a figure unchanged from May. Inflation concerns have lessened, with only 11% considering it their top issue, down three points since May.

The overall health of respondents' businesses showed signs of weakening; only 8% reported being in excellent condition, while those describing their status as fair or poor increased.

Job openings remain challenging to fill, with 36% of small business owners unable to find suitable candidates—an increase from May. Additionally, labor costs rose slightly as more businesses reported raising compensation levels.

Business expansion plans appear cautious; only 11% consider it a good time to expand despite an uptick from May's figures.

Taxes remain at the forefront of issues facing small business owners, with nineteen percent listing them as their most pressing concern—the highest level since July 2021.

The NFIB has been collecting data on Small Business Economic Trends since the fourth quarter of 1973 through quarterly surveys and monthly surveys since 1986. The latest survey was conducted in June and is part of NFIB’s ongoing effort to monitor and report on small business sentiment across the country.