The Sconi

The National Federation of Independent Business (NFIB) has released its Small Business Optimism Index for June, showing a slight decline of 0.2 points to 98.6. This figure remains slightly above the long-term average of 98 over the past 51 years. The drop was largely attributed to an increase in reports of excess inventories among small business owners.

NFIB Chief Economist Bill Dunkelberg commented on the findings: “Small business optimism remained steady in June while uncertainty fell.” He added that taxes continue to be a significant concern, stating, “Taxes remain the top issue on Main Street, but many others are still concerned about labor quality and high labor costs.”

In Wisconsin, State Director Luke Bacher noted that while small businesses are optimistic, they face challenges with rising taxes and labor quality issues. Bacher highlighted recent legislative actions as beneficial: “Congress recently made the 20% Small Business Tax Deduction permanent, which is a huge relief for business owners.” He also mentioned state-level measures such as a $1.5 billion tax cut and increased tourism funding.

Key data from the report showed mixed signals regarding inventory levels, sales expectations, and hiring plans among small businesses:

- A net negative 5% of owners viewed their inventory stocks as too low in June.

- The percentage expecting better business conditions fell by three points to a net 22%.

- There was a three-point drop in those anticipating higher real sales volumes.

- Twenty-one percent plan capital outlays within six months.

Labor market challenges persisted with labor quality remaining a key issue for 16% of respondents. Inflation concerns eased slightly with only 11% citing it as their main problem. Additionally, job openings were difficult to fill for many businesses despite hiring efforts.

On financial matters, interest rates and financing difficulties were not major concerns overall but did see slight changes compared to May.

The NFIB's monthly jobs report indicated that compensation increases were more common in June than earlier months this year. Plans for raising compensation have dipped slightly for the upcoming quarter.

This survey reflects ongoing economic challenges and adaptations among small businesses across various sectors. Conducted monthly since 1986 by NFIB’s Research Center, it provides insight into the current climate facing small enterprises nationwide.