Hawkeye Reporter

The NFIB Small Business Optimism Index showed little change in June, dropping slightly by 0.2 points to 98.6, which remains above the long-term average of 98. The most significant factor in this decline was an increase in respondents reporting excess inventories. Meanwhile, the Uncertainty Index decreased by five points to 89.

"Small business optimism remained steady in June while uncertainty fell," said NFIB Chief Economist Bill Dunkelberg. "Taxes remain the top issue on Main Street, but many others are still concerned about labor quality and high labor costs."

Matt Everson, NFIB Iowa State Director, commented on the situation for local businesses: "Iowa’s small businesses are navigating a steady landscape, yet the persistent concern regarding labor quality and rising taxes continues to hinder small business growth." He noted that recent legislative changes in Washington D.C., such as making the 20% Small Business Tax Deduction permanent, provide some relief.

Key findings from the report include a net negative 5% of owners viewing current inventory stocks as "too low," signaling an increase in inventories compared to May. Additionally, expectations for better business conditions and higher real sales volumes both saw declines.

Labor quality remains a critical issue for many small business owners, with 16% identifying it as their primary concern. Inflation concerns have eased somewhat, with only 11% citing it as their main problem—down three points from May.

Employment challenges persist as well; a seasonally adjusted 36% of small business owners reported unfilled job openings in June. Despite these challenges, there is some positive news: compensation plans are up seven points from May.

The survey also highlighted issues with financing and interest rates; only three percent cited them as their top problem. However, borrowing activity has increased slightly.

Overall health assessments of businesses showed some deterioration; fewer respondents rated their business health as excellent or good compared to previous months.

The NFIB Research Center has been collecting data on small business economic trends since 1973 through quarterly surveys and monthly surveys since 1986. This latest survey was conducted in June 2025.