Prairie State Wire

The National Federation of Independent Business (NFIB) has released its Small Business Optimism Index for August, showing a decline of 2.5 points to 91.2, erasing the gains made in July. This marks the 32nd consecutive month that the index has remained below the long-term average of 98. The Uncertainty Index rose to 92, reaching its highest level since October 2020.

Inflation continues to be a major concern for small business owners, with 24% identifying it as their primary challenge, although this is a slight decrease from July's figures. NFIB Chief Economist Bill Dunkelberg commented on the situation: “The mood on Main Street worsened in August, despite last month’s gains,” adding that "Historically high inflation remains the top issue for owners as sales expectations plummet and cost pressures increase."

Noah Finley, NFIB Illinois State Director, echoed these concerns: “The latest Small Business Optimism Index confirms that small business owners remain pessimistic about today’s economy,” he said. He highlighted issues specific to Illinois businesses such as economic uncertainty and rising costs.

Key findings from the report include a net negative profit trend at -37%, marking a seven-point drop from July and reaching its lowest point since March 2010. Additionally, there was a nine-point fall in real sales volume expectations to a net negative of -18%. Despite these challenges, some businesses plan to raise compensation over the next three months.

Employment challenges persist with many businesses struggling to fill job openings. A reported 40% of small business owners have unfilled positions due to a lack of qualified applicants.

Capital outlays have increased slightly with more businesses investing in new equipment and facilities over the past six months. However, inventory levels remain low with few expecting significant changes soon.

Overall borrowing needs appear largely satisfied among respondents but access to loans has become more difficult compared to previous attempts.

This survey data is collected by NFIB's Research Center through monthly surveys conducted among randomly selected members since 1986.