The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index increased by 0.8 points in November, reaching 99.0 and remaining above the historical average of 98. The index, which measures the outlook of small business owners, saw gains in six out of ten components.
A notable driver for this increase was a rise in expectations for higher real sales volumes among small business owners. However, the Uncertainty Index also climbed by three points to 91, primarily due to more owners expressing uncertainty about capital expenditure plans over the next three to six months.
NFIB Chief Economist Bill Dunkelberg stated, “Although optimism increased, small business owners are still frustrated by the lack of qualified workers. Despite this, more firms still plan to create new jobs in the near future.”
Michael Smith, NFIB State Director, commented on ongoing hiring difficulties: “While our members are cautiously optimistic, finding qualified applicants remains a real challenge that does not appear to be getting any easier to navigate. Without enough workers, it’s much more challenging for small businesses to expand their operations and meet their customers’ needs.”
According to survey data collected from NFIB members nationwide in November:
– The percentage of owners raising average selling prices jumped 13 points from October to a net 34% (seasonally adjusted), marking both the highest reading since March 2023 and the largest monthly jump recorded.
– Labor quality was cited as the single most important problem by 21% of respondents—down six points from October—making it the top concern ahead of inflation.
– A net 15% expect higher real sales volumes going forward—a nine-point increase over October.
– The average rate paid on short maturity loans fell to 7.9%, down from October and at its lowest since May 2023.
– When asked about overall business health: 11% described their situation as excellent (down one point), while 53% said good (up two points). Thirty percent reported fair conditions (down three points), and five percent described their health as poor (up one point).
– Supply chain disruptions affected 64% of respondents—an increase over October—with varying degrees of impact reported.
Hiring challenges persist; a seasonally adjusted 33% had job openings they could not fill—above historic averages—and among those trying to hire in November, nearly nine out of ten found few or no qualified applicants. Plans for new hiring rose four points from October; a net adjusted figure of 19% intend to create jobs within three months—the highest level since December last year.
Inflation remained prominent with a net 34% reporting price increases—the sharpest month-to-month rise ever observed in this survey series—and price hikes well above long-term averages suggest continued pressure on costs. Looking ahead three months, a net seasonally adjusted figure of 30% plan further price increases.
Profit trends showed slight improvement but remain negative overall; weaker sales and rising material costs were common reasons given for lower profits.
Capital investment appears subdued: only half reported capital outlays recently—a weak result historically—and just one-fifth plan such spending soon.
The report also noted that expectations for better business conditions declined five points compared with October and have dropped significantly since January.
The latest findings were discussed further on NFIB’s “Small Business by the Numbers” podcast featuring Holly Wade and Peter Hansen.
