The NFIB Small Business Optimism Index rose by 0.3 points in September to 91.5. This is the 33rd consecutive month below the 50-year average of 98. The Uncertainty Index rose 11 points to 103, the highest reading recorded. Fifty-one percent of owners reported capital outlays in the last six months, down five points from August. Meanwhile, the number of owners reporting inventory gains fell four points to a net negative 13% (seasonally adjusted), the lowest reading since June 2020.

“Small business owners are feeling more uncertain than ever,” said NFIB Chief Economist Bill Dunkelberg. “Uncertainty makes owners hesitant to invest in capital spending and inventory, especially as inflation and financing costs continue to put pressure on their bottom lines. Although some hope lies ahead in the holiday sales season, many Main Street owners are left questioning whether future business conditions will improve.

Key findings include:

• The net percent of owners reporting inventory gains fell four points to a net negative 13% (seasonally adjusted), the lowest reading since June 2020.
• The average rate paid on short maturity loans was 10.1%, up 0.6 of a point from August. The last time it was this high was February 2001.
• Thirty-four percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down six points from August and the lowest reading since January 2021.
• A net 12% of owners reported paying a higher rate on their most recent loan, down three points from August and the lowest reading since March 2022.
• Fifty-one percent reported capital outlays in the last six months, down five points from August. The last time it was this low was July 2022.
• Seasonally adjusted, a net 32% reported raising compensation, down one point from August and remaining the lowest reading since April 2021.
• Twenty-three percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs), down one point from August but remaining the top issue.

As reported in NFIB’s monthly jobs report, a seasonally adjusted 34% of all small business owners reported job openings they could not fill in their current period, down six points from August and the lowest reading since January 2021. Of the 59% of owners hiring or trying to hire in September, 90% reported few or no qualified applicants for the positions they were trying to fill.

Fifty-one percent of owners reported capital outlays in the last six months, down five points from August. Of those making expenditures, 35% reported spending on new equipment, 23% acquired vehicles, and 15% improved or expanded facilities. Ten percent spent money on new fixtures and furniture and 4% acquired new buildings or land for expansion. Nineteen percent (seasonally adjusted) plan capital outlays in the next six months, down five points from August.

A net negative 17% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, down one point from August and the lowest reading of this year. The net percent of owners expecting higher real sales volumes rose nine points to a net negative 9% (seasonally adjusted).

The net percent of owners reporting inventory gains fell four points to a net negative 13%, seasonally adjusted, the lowest reading since June 2020. Not seasonally adjusted, 10% reported increases in stocks and 22% reported reductions.

A net negative 4% (seasonally adjusted) of owners viewed current inventory stocks as “too low” in September, up one point from August. A net negative 3% (seasonally adjusted) of owners plan inventory investment in the coming months, down two points from August.

The net percent of owners raising average selling prices rose two points from August to a net 22% seasonally adjusted. Twenty-three percent of owners reported that inflation was their single most important problem in operating their business, down one point from August and remaining the top issue. Unadjusted, 13% reported lower average selling prices and 34% reported higher average prices.

Price hikes were the most frequent in the finance (64% higher, 4% lower), retail (48% higher, 9% lower), transportation (41% higher, 18% lower), and construction (38% higher, 12% lower) sectors. Seasonally adjusted, a net 25% plan price hikes in September.

Seasonally adjusted, a net 32% reported raising compensation, down one point from August and remaining and the lowest reading since April 2021. A seasonally adjusted net 23% plan to raise compensation in the next three months, up three points from August. Nine percent of owners cited labor costs as their top business problem, unchanged from August and only four points below the highest reading of 13% reached in December 2021. Seventeen percent said that labor quality was their top business problem, remaining behind inflation as the number one issue.

The frequency of reports of positive profit trends was a net negative 34% (seasonally adjusted), up three points from August. Among owners reporting lower profits, 37% blamed weaker sales, 14% blamed the rise in the cost of materials, 13% cited labor costs, and 11% cited lower selling prices. For owners reporting higher profits, 47% credited sales volumes, 26% cited usual seasonal change, and 9% cited higher selling prices.

Two percent of owners reported that all their borrowing needs were not satisfied. Twenty-four percent reported all credit needs met and 62% said they were not interested in a loan. A net 8% reported their last loan was harder to get than in previous attempts.

Four percent of owners reported that financing was their top business problem in September, unchanged from August.

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in September 2024.