The National Federation of Independent Business (NFIB) released its monthly Small Business Optimism Index, which showed a 1.7-point increase in July to 100.3. This figure is slightly above the index’s 52-year average of 98. The main contributors to this rise were small business owners reporting improved business conditions and viewing it as a good time to expand.
John Kabateck, NFIB California State Director, commented on the findings: “Glad to see small-business owners nationally breaking out of the economic slump that has hung over them for too long, but can their California counterparts share in the good news? We are not a small-business-friendly state, the latest proof of which came from the State Assembly’s refusal to give Senate Bill 84 even one hearing. The modest measure would have provided small-business owners a safe-harbor of time to correct an ADA violation before being subjected to a shakedown lawsuit. It passed the Senate 34 to 2 with big bipartisan support. We’ll see how much worse or better it can get in the month remaining in the 2025 session of the Legislature.”
The Small Business Optimism Index is widely used by policymakers including the Federal Reserve and Congress as an indicator of economic health among small businesses nationwide. The report reflects data from NFIB-member businesses across the country, typically employing between one and nine people with annual gross sales averaging about $500,000.
Bill Dunkelberg, NFIB Chief Economist, stated: “Optimism rose slightly in July with owners reporting more positive expectations on business conditions and expansion opportunities. While uncertainty is still high, the next six months will hopefully offer business owners more clarity, especially as owners see the results of Congress making the 20% Small Business Deduction permanent and the final shape of trade policy. Meanwhile, labor quality has become the top issue on Main Street again.”
In July’s survey results:
– Thirteen percent rated their business health as excellent (up five points), while 52% reported good (up three points). Thirty-one percent rated their business as fair (down four points), and four percent reported poor (down three points).
– Eleven percent cited poor sales as their top problem—an increase of one point—marking its highest level since February 2021.
– Owners expecting better business conditions increased by 14 points from June to a net seasonally adjusted 36%, surpassing historical averages.
– Sixteen percent said it was a good time to expand their businesses—up five points from June.
NFIB has advocated for independent businesses for over eight decades at both federal and state levels. More information can be found at www.nfib.com.
