The NFIB Small Business Optimism Index rose by 1.7 points in July, reaching 100.3 and surpassing the long-term average of 98 for the past 52 years. The main factors contributing to this increase were more small business owners reporting improved business conditions and a greater number indicating it is a good time to expand their operations.
Despite this optimism, the Uncertainty Index also climbed by eight points from June to 97, signaling that uncertainty among small business owners remains high. Labor quality continued to be a significant concern, with 21% of respondents identifying it as their primary challenge—an increase of five points from the previous month.
Bill Herrle, Executive Director for NFIB Florida, commented on these trends: “Florida’s small business owners are reporting increased optimism and better business conditions to end the summer. While finding qualified workers is still a top problem for Main Street, we are hopeful that business conditions continue to improve following Congress making the Small Business Deduction permanent.”
Survey results indicated an improvement in overall business health: 13% of respondents rated their businesses as excellent (up five points), and 52% said their businesses were in good health (up three points). Those rating their business as fair fell by four points to 31%, while those reporting poor health dropped three points to 4%.
Poor sales became a more prominent issue for some, with 11% of small business owners listing it as their top problem—the highest level since February 2021. Expectations for better business conditions improved significantly, with a net 36% expecting improvements (seasonally adjusted), up 14 points from June.
Sixteen percent of respondents felt it was a good time to expand their businesses—an increase of five percentage points from last month. Inflation remained steady as an important issue, with 11% citing it as their most pressing concern.
Expectations for higher real sales volumes declined slightly by one point to a net 6%. Planned capital outlays over the next six months rose one point to 22%, but this figure is still below the historical average of 29%.
Hiring difficulties persisted: according to NFIB’s monthly jobs report, a seasonally adjusted 33% reported unfilled job openings in July—down three points from June but above the historical average. Of those hiring or attempting to hire in June, most struggled with finding qualified applicants. Fourteen percent planned new job creation within three months.
Reports of labor costs as the main problem dropped by one point from June, now at 9%. Compensation increases were less common than in previous months; seasonally adjusted data show that a net 27% raised compensation (down six points) and only a net 17% plan further increases soon.
Capital spending saw some improvement: fifty-five percent reported outlays in the past six months (up five points). Most expenditures went toward new equipment or vehicles; others focused on facilities or land expansion.
Sales trends remained weak overall—a net negative nine percent reported higher nominal sales over the past quarter (down four points). Inventory levels stayed stable at a net negative eight percent seasonally adjusted.
Price increases moderated somewhat; plans for future price hikes dropped four points but remain above historical averages—a sign that inflation pressures persist.
Profit trends showed little change; many cited weaker sales or higher material costs for lower profits while others attributed improvements mainly to stronger sales volumes or seasonal changes.
Financing concerns edged up slightly: four percent named financing and interest rates as their top problem. Borrowing rates were historically low, with just one-quarter borrowing regularly and few reporting difficulty securing loans compared with prior attempts.
Taxes continued as another major concern at seventeen percent—second only to labor quality—and government regulation issues ranked fifth at eight percent. Competition from larger businesses was less frequently cited than before.
NFIB has been conducting these economic trend surveys since the early seventies using random samples from its membership base. The latest survey reflects responses collected during July 2025 and forms part of regular monthly reports released by NFIB’s Research Center.
