The latest NFIB Small Business Optimism Index showed an increase of 0.5 points in August, reaching 100.8. This figure is nearly three points above the 52-year average of 98. Among the ten components that make up the index, four increased, four decreased, and two remained unchanged. The main factor contributing to the rise was an increase in small business owners expecting higher real sales.
Michael Iosua, state director for NFIB in Hawaii, commented on the new data: “It’s a very positive sign that the last few Small Business Optimism Indexes have shown readings above their 52-year average. It wasn’t that long ago, November last year, that they went 34 months below the average. Still, it might be a bit premature to say the Main Streets of America are back to their pre-pandemic vibrancy.”
The NFIB Small Business Optimism Index is widely recognized as a key measure of small business sentiment in the United States. It is referenced by organizations such as the Federal Reserve and Congress when assessing economic conditions for small businesses across the country. The survey provides a national overview based on responses from NFIB members who typically employ between one and nine people and report about $500,000 in annual gross sales.
NFIB Chief Economist Bill Dunkelberg said: “Optimism increased slightly in August with more owners reporting stronger sales expectations and improved earnings. While owners have cited an improvement in overall business health, labor quality remained the top issue on Main Street.”
According to highlights from August’s report:
– Fourteen percent of respondents rated their business health as excellent (up one point), while 54% described it as good (up two points). Twenty-seven percent considered their business health fair (down four points), and 4% reported poor (unchanged).
– Labor quality remains a significant concern for small businesses; 21% identified it as their most important problem.
– Thirty-two percent of owners reported having job openings they could not fill during August—a decrease from July figures—marking the lowest level since July 2020.
– The net percentage of owners raising average selling prices dropped three points from July to a net 21%, which is this year’s lowest reading.
For ongoing updates about Hawaii’s small-business community, visit www.nfib.com or follow NFIB Hawaii on X @NFIB_HI.
