SPRINGFIELD, ILL.– The NFIB Small Business Optimism Index declined 2.0 points in September to 98.8. This was the first decline in three months, though it remains above the survey’s 52-year average of 98. The Uncertainty Index rose seven points from August to 100, the fourth-highest reading in over 51 years.
“Optimism among small business owners decreased in September,” said NFIB Chief Economist Bill Dunkelberg. “While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges. Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations.”
“Market uncertainty continues to hamper Main Street growth,” said NFIB Illinois State Director Noah Finley. “As Illinois legislators return to Springfield for the fall veto session, small businesses are worried about tax-increase proposals and the ongoing high energy costs that are dragging down Illinois’ Main Street businesses.”
Key findings include:
- Supply chain and inflation issues stood out as a key problem in the report. The net percent of owners raising average selling prices rose three points from August to a net 24 percent (seasonally adjusted). A net 31 percent (seasonally adjusted) plan to increase prices over the next three months, up five points from August.
- Fourteen percent of owners reported that inflation was their single most important problem in operating their business (higher input costs), up three points from August.
- In September, 64percent of small business owners reported that supply chain disruptions were affecting their business to some degree, up 10 points from August.
- A net negative seven percent (seasonally adjusted) of owners viewed current inventory stocks as “too low” in September, down seven points from August. This was the largest monthly decline in the survey’s history.
- One bright spot was actual earnings changes (the net percent of owners reporting higher vs. lower profits), which increased three points in September, up to its highest level since December 2021.
- The net percent of owners expecting better business conditions fell 11 points from August to a net 23 percent (seasonally adjusted).
- In September, 18 percent of small business owners cited labor quality as their single most important problem, down three points from August and tying with taxes as the top single most important problem.
As reported in NFIB’s monthly jobs report, a seasonally adjusted 32 percent of all small business owners reported job openings they could not fill in September, unchanged from August. The last time unfiled job openings fell below 32 percent was in July 2020. Of the 58 percent of owners hiring or trying to hire in September, 88 percent reported few or no qualified applicants for the positions they were trying to fill. A seasonally adjusted net 16percent of owners plan to create new jobs in the next three months, up one point from August and the fourth consecutive monthly increase. Hiring plans are at their highest level since January.
Labor costs reported as the single most important problem for business owners rose by 3 points from August to 11 percent . Seasonally adjusted, a net 31 percent reported raising compensation, up 2 points from August. A seasonally adjusted net 19 percent plan to raise compensation in the next three months, down one point from August.
Fifty-six percent of small business owners reported capital outlays in the last six months, unchanged from August. Of those making expenditures, 42 percent reported spending on new equipment, 22 percent acquired vehicles, and 14 percent improved or expanded facilities. Eleven percent spent money on new fixtures and furniture and five percent acquired new buildings or land for expansion. Twenty-one percent (seasonally adjusted) plan capital outlays in the next six months, unchanged from August and a historically weak reading.
A net negative seven percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up two points from August. More firms reported declining sales than reported gains. The net percent of owners expecting higher real sales volumes fell four points from August to a net eight percent (seasonally adjusted).
The net percent of owners reporting inventory gains rose three points to a net negative three percent , seasonally adjusted. Not seasonally adjusted, 10 percent reported increases in stocks, and 12 percent reported reductions. A net one percent (seasonally adjusted) of owners plan inventory investment in the coming months, unchanged from August.
Price increases remain above the monthly average of a net 13 percent , suggesting continued inflationary pressure. Unadjusted, 33 percent of owners reported higher average selling prices and 10 percent reported lower average prices. Seasonally adjusted, a net 31 percent plan to increase prices in the next three months, up five points from August.
The frequency of reports of positive profit trends improved 3 points from August to a net negative 16percent (seasonally adjusted). September’s reading was the highest since December 2021. Among owners reporting lower profits, 33percent blamed weaker sales, 17percent cited the rise in the cost of materials, 10percent cited price change for their product(s) or service(s) and 9percent cited labor costs. Among owners reporting higher profits, 58percent credited sales volumes, 21percent cited usual seasonal change, and 6percent cited higher selling prices.
A net seven percent of owners reported that their last loan was harder to get than in previous attempts, up four points from August and the highest reading of the year. Furthermore, a net seven percent reported paying a higher rate on their most recent loan and the average rate paid on short maturity loans was 8.8 percent in September, up 0.7 points from August. Twenty-six percent of all owners reported borrowing on a regular basis, up three points from August.
Owners’ overall assessment of their business’ health was generally unchanged. When asked to rate the overall health of their business, 11percent of owners reported excellent (down 3 points), and 57percent reported good (up 3 points). Twenty-seven percent reported the health of their business was fair (unchanged) and 4percent reported poor (unchanged).
In September, 11 percent (seasonally adjusted) of owners reported that it is a good time to expand their business, down three points from August. This is, comparatively, a relatively weak reading.
Eighteen percent of small business owners reported taxes as their single most important problem, up one point from August and ranking as the top problem alongside labor quality. The percent of small business owners reporting government regulations and red tape as their single most important problem fell three points to six percent.
The percent of small business owners reporting poor sales as their top business problem remained at 10 percent. Five percent reported competition from large businesses as their single most important problem, unchanged from August.
In September, eight percent reported the cost or availability of insurance as their single most important problem, down one point from August. Four percent reported that financing and interest rates was their top business problem in September, unchanged from August.
The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in September 2025.
For over 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses, and remains so today. For more information, please visit nfib.com.