New Data Shows Fewer Small Businesses Plan To Make Capital Investments

The National Federal of Independent Business released its latest Small Business Optimism Index on June 9. The survey showed smaller U.S. firms are struggling with high fuel prices and overall inflation. (The National Association of Manufacturers’ second quarter Manufacturers’ Outlook Survey found that industry also is struggling with higher costs, along with trade uncertainty.)

The Small Business Optimism Index fell 0.6 points in May to 95.3 and remained below its 52-year average of 98.0. The uncertainty index rose three points from April to 91, remaining well above its historical average of 68.

Key findings from the report include:

• Only sixteen percent of small business owners plan to make capital outlays in the next six months, down one point from April and the lowest level since March 2009.
• Reports of supply chain disruptions picked up, with a shift from those reporting no disruptions to those reporting mild or moderate disruptions. Seventy percent of small business owners reported that supply chain disruptions affected their business to some extent, up six points from April.
• That employment remained essentially flat in May. The NFIB’s subindex registered 100.3 in May, a slight decline from April’s 100.4 reading but the third drop in a row
• Job openings and hiring plans fell notably to the lowest levels in six years. Twenty-nine percent of all owners reported job openings they could not fill in the current period, down five points from April and marking the lowest level since May 2020.
• Only nine percent of owners plan to create new jobs in the next three months, down four points from April, also marking the lowest level since May 2020.
• In May, 13 percent of small business owners cited labor quality as their single most important problem, down five points from April and marking the lowest level since December 2016.
• Eighteen percent of business owners cited inflation as their single most important business problem, up two points from April and marking the highest reading since December 2024. Inflation ranks as the second top problem.