The National Federation of Independent Business (NFIB) Research Center released its second “State of the States” SBET report, examining economic activity among Florida’s small businesses. The report shows Florida has clear advantages over the nation as a whole in three NFIB Indexes: Optimism, Employment, and declining Uncertainty. Looking at the top challenges facing small businesses in the state, insurance is a particular challenge, but taxes are a major advantage in Florida.

“This report shows what Floridians already know: the Sunshine State is one of the best places to own, operate, and grow a small business,” said Bill Herrle, NFIB’s Florida Executive Director. “While Florida small business owners are managing specific challenges like rising insurance costs, they are still at an advantage thanks to our business-friendly tax climate.”

Florida Small Business Optimism Index

Florida’s Optimism Index continues to show the state comfortably ahead of the U.S. overall, as it has been for much of the data history. In the current period, Florida’s Optimism Index scores at 100.3 vs. 98.5 for the U.S.

• Looking at the underlying components, Florida massively outperforms the rest of the country on real sales expectations (+16 points) while it significantly underperforms on earnings trends (-9 points).

Business Health

When asked about the overall health of their business, Florida’s small business owners reported that they are performing moderately better than the rest of the country.

• More small business owners reported their business health as “good” and fewer reported it as “fair”.

Employment Index

NFIB’s new Employment Index incorporates 6 components related to hiring and compensation and turns them into a single number. A higher number means a tighter labor market where workers are harder to find and retain, and a lower number means a weaker labor market where hiring and retention are relatively easier.

Florida’s Employment Index has generally remained close to the average for businesses throughout the country.

• In the current period, Florida’s Index increased to 103.7, 2.2 points higher than the national Index.
• Both nationally and in Florida, the labor market has tightened, and owners continue to report challenges in finding qualified workers.

Uncertainty Index

Uncertainty among Florida’s small business owners decreased dramatically this winter.

• The major decline in the Uncertainty Index is a positive development since it was accompanied by positive gains in other key metrics.
• While the Uncertainty Index for the rest of the country also eased, it remained elevated overall.

Single Most Important Problem

Florida’s small business owners are much happier with their tax situation than those in the rest of the country (7% top issue in Florida vs. 17% in the U.S.). However, labor cost and labor quality stand out as top challenges for Florida’s small employers.

• Labor challenges are the only concerns that are meaningfully worse in Florida than in the rest of the states combined. Unfortunately, these metrics have also worsened more significantly than for the U.S. overall.

View the full report here.