WASHINGTON, D.C. (August 26, 2025) – The NFIB Research Center released an industry-specific quarterly Small Business Economic Trends survey highlighting the construction, manufacturing, retail, and services industries. According to the report, the Optimism Index across the four reported industries rose from the previous quarter, a reversal from the January to April period. Optimism was highest in the manufacturing industry and lowest in the retail industry. Expectations for better business conditions improved from April across all four industries, and it was the primary contributor to the rise in optimism among construction, manufacturing, and retail firms. 

“Small business optimism increased in all four industry sectors, with optimism being the highest in manufacturing primarily due to increased expectations for better business conditions in the next six months,” said Holly Wade, Executive Director of NFIB’s Research Center. “For small businesses overall, supply chains remain a challenge, with 64% reporting disruptions. Nonetheless, 65% of owners rated the overall health of their business as excellent or good.” 

The survey was conducted in July and the overall Optimism Index in July was 100.3. 

Key findings by industry include: 

Construction

• In July, the Optimism Index for the construction industry increased by 3.1 points from the previous quarter to 104.0. Improved expectations for better business conditions and earnings trends largely drove the rise in the Index. The construction industry was more optimistic than the overall small business population, with an Index reading 3.7 points higher than all firms. 

• The construction industry stood out from the other industries in labor scarcity. Fifty-three percent (seasonally adjusted) of small businesses in the construction industry reported unfilled job openings, a decrease of 1 point from April. Despite this decline, it was the highest among all four industries and is 20 points above the overall level for all firms. Construction was the only industry to see a decline in job openings from the previous quarter. 

• Sixty-one percent of construction firms reported few or no qualified applicants for their open positions, up 5 points from April and 13 points higher than reported for all firms. Thirty-six percent of small business owners in the construction industry reported labor quality as their single most important problem, 15 points higher than for all firms and the highest of all four industries. 

• A seasonally adjusted net 21% of small businesses in the construction industry plan to hire in the next three months, up 1 point from April and 7 points higher than the reading for all firms. 

Manufacturing

• Manufacturing was the most optimistic of the four industries, with an Index of 106.5, up 6.7 points from the previous quarter and 6.2 points higher than the all-firms reading. The rise was primarily due to an improvement in those reporting better expected business conditions and higher real sales expectations.  

• A net 51% (seasonally adjusted) of firms in the manufacturing industry expect better business conditions in the next six months, the highest among all four industries and higher than the all-firms reading of a net 36% (seasonally adjusted). 

• The manufacturing industry also experienced the largest quarterly improvement for better business conditions across all industries, increasing 36 points from April. Additionally, the manufacturing industry had the highest percent of small business owners reporting that it is now a good time to expand (20% seasonally adjusted), which is 4 points higher than for all firms. 

• The net percent of manufacturing firms expecting real sales to increase rose 12 points from April to a net 22% (seasonally adjusted). This was the highest among all four industries and 16 points better than for all firms. 

Retail

• The Optimism Index for the retail sector rose 2.1 points from April to 96.0. Despite this increase, small business owners in retail were the least optimistic among all four industries, and 4.3 points below that of all firms. It was also the only industry with an Index below the overall historical average of 98. 

• Expectations for better business conditions increased by 15 points from the previous quarter to a net 29% (seasonally adjusted), contributing the most to the rise in the Index. This marked a reversal from the decline in better business conditions between January 2025 and April 2025. Despite the significant increase from April, the retail industry’s reading is lower than that for all firms, registering a net 36% seasonally adjusted. 

• The survey questions on inventory were a negative spot for the retail industry. Inventory satisfaction and plans were the poorest in the retail industry. In July, a net negative 13% (seasonally adjusted) of retailers reported current inventory levels as “too low,” unchanged from April and 10 points lower than the all-firms reading, indicating “too high” characterized most stocks. Although unchanged from the previous quarter, this was the weakest reading of all industries. 

• A seasonally adjusted net negative 6% plan to increase inventories over the next three to six months, down 2 points from April and 7 points below the all-firms reading. Inventory plans were also the poorest in the retail industry. 

• The retail industry had the lowest earnings trend, with a seasonally adjusted net negative 26%, which is only 4 points lower than that for all firms. This means that 26% of retail small business owners reported lower earnings during the last calendar quarter compared to the percent reporting better earnings. 

Services

• In July, the Optimism Index for the services industry was 99.7, up 0.8 of a point from April. This was the smallest quarterly change among all four industries and the closest to the all-firms reading of 100.3. The increase in the Index was driven by more respondents saying it is a good time to expand and higher sales expectations, but was offset by a decline in those planning to increase inventories in the next three to six months. 

• A net 1% (seasonally adjusted) of small business owners in the services industry reported their current inventory as “too low.” This was the best reading among all four industries and 4 points higher than for all firms. 

The full report is available here.