Hawkeye Reporter

The latest NFIB (National Federation of Independent Business) report reveals a significant decline in small business optimism for August, with the Small Business Optimism Index dropping 2.5 points to 91.2. This marks the 32nd month that the index remains below the 50-year average of 98. Additionally, the Uncertainty Index reached its highest level since October 2020, standing at 92. Inflation continues to be the primary concern for small business owners, with 24% identifying it as a major issue, a slight decrease from the previous month.

NFIB Chief Economist Bill Dunkelberg commented on the situation stating, “The mood on Main Street worsened in August, despite last month’s gains. Historically high inflation remains the top issue for owners as sales expectations plummet and cost pressures increase. Uncertainty among small business owners continues to rise as expectations for future business conditions worsen.”

Matt Everson, NFIB State Director, expressed concern over the recent findings, saying: “The recent decline in the Small Business Optimism Index is beyond alarming. Iowa small business owners are facing significant challenges with rising inflation and a potential small business tax increase on the horizon. This complicates their ability to make future plans. We must unite to empower our local businesses and help them thrive in these difficult times.”

The report's key findings include a net negative 37% in positive profit trends, marking the lowest point since March 2010. Meanwhile, 24% of business owners reported inflation as their most pressing problem. The expectation for higher real sales volumes fell sharply by nine points to a net negative 18%.

On employment, 40% of small business owners are struggling to fill job openings, up two points from July. Of those hiring, 90% found few or no qualified applicants. Spending has risen slightly; 56% of owners reported capital outlays in the last six months, with significant investments in new equipment and facilities.

The report further highlights that a significant 33% of owners raised compensation levels. However, only 9% saw labor costs as their major issue. The difficulty in acquiring finance increased marginally, with 4% identifying it as their top problem.

The historical data from the NFIB Research Center, ongoing since 1986 on a monthly basis, offers a comprehensive view of small business economic trends. This recent survey, conducted in August 2024, reflects the ongoing challenges that small businesses face amid an uncertain economic climate.