NFIB Small Business Optimism Index Inches Higher in September

On Tuesday, the National Federation of Independent Business (NFIB), one of the largest small business associations in the US, released its Small Business Optimism Index (SBOI) for September. The September SBOI increased 0.3 point to a reading of 91.5. This is the 33rd consecutive month the Index has been below the 50-year average of 98.

The Uncertainty Index rose 11 points to a reading of 103, the highest reading ever recorded. Fifty-one percent of owners reported capital outlays in the last six months, down five points from August.

Other highlights of the SBOI include the following:

• The net percent of owners reporting inventory gains fell 4 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 6 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 3 points from August and the lowest reading since March 2022.
• Fifty-one percent reported capital outlays in the last six months, down 5 points from August. The last time it was this low was July 2022.
• Seasonally adjusted, a net 32% reported raising compensation, down 1 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 1 point from August but remaining the top issue.

In remarks accompanying the report, NFIB Chief Economist Bill Dunkelberg said:

“Small business owners are feeling more uncertain than ever. 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.”