Great Lakes Wire

The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index in October dropped by 0.6 points to 98.2, though it remained above the long-term average of 98. The Uncertainty Index saw a significant decrease, falling 12 points from September to reach 88, marking its lowest level this year.

While data specific to Michigan was not available, Amanda Fisher, NFIB Michigan State Director, commented on the challenges faced by small businesses in the state. “Small business owners reported lower sales and reduced profits in October, leading to the dip in optimism. Hiring remains the biggest challenge for Michigan’s small businesses as labor quality is ranked as the top business problem.”

In addition to releasing its October report, NFIB announced a new podcast titled “Small Business by the Numbers.” Hosted by Holly Wade, Executive Director of the NFIB Research Center, the podcast will discuss trends and conditions impacting small businesses across the country.

Key findings from the October survey indicate that hiring difficulties persist. Thirty-two percent of all owners reported job openings they could not fill—unchanged for two consecutive months and matching levels last seen in December 2020 before August of this year. Labor quality was cited as the most important problem by 27% of respondents—up nine points from September and just below a record high reached in November 2021.

Sales performance weakened during October. A net negative 13% of owners reported higher nominal sales over the past three months—a decline of six points from September. Reports of positive profit trends also fell sharply by nine points to a net negative 25%, which contributed most significantly to the overall drop in optimism.

Price pressures showed some easing but remained above historical averages. The net percentage of owners raising average selling prices decreased three points to a net 21%. Looking ahead, a net 30% plan price increases over the next three months—a slight reduction from September’s figure.

Inventory levels declined further with a net negative six percent reporting inventory gains after seasonal adjustment; more owners viewed their current stocks as too low compared with September’s record monthly decline.

Supply chain disruptions continued but affected fewer businesses than previously: sixty percent said their operations were impacted at least somewhat—down four points since last month.

Expectations for improved business conditions fell again; only a net twenty percent anticipated better conditions over coming months—the lowest reading since April but still above historical norms.

Labor costs were less frequently cited as a primary concern compared with previous months; eight percent identified them as their top issue (down three points), while compensation increases slowed both in actual changes and future plans.

Capital investment activity softened slightly: fifty-five percent made capital outlays within six months (a one-point decrease). Among these expenditures, new equipment purchases led at thirty-six percent followed by vehicle acquisitions and facility improvements or expansions.

Loan access appeared somewhat easier than earlier this year: five percent found loans harder to obtain compared with prior attempts—a two-point improvement—and only one percent paid higher interest rates on recent loans.

Business health assessments showed some deterioration: twelve percent rated their business’ health as excellent (up one point), while those rating it good fell six points to fifty-one percent; thirty-three percent described it as fair (up six), with four percent saying poor (unchanged).

Inflation concerns moderated slightly: twelve percent listed inflation as their main problem—down two points from September—and reports citing poor sales or competition from larger firms remained stable at ten and five percent respectively.

The NFIB has been conducting its Small Business Economic Trends survey quarterly since late 1973 and monthly since 1986 using randomly selected members. The latest results are based on responses collected during October 2025.