The National Federation of Independent Business (NFIB) Research Center released its second “State of the States” SBET report, examining economic activity among Ohio’s small businesses. After comparing favorably to the U.S. in the previous report, Ohio looks more in line with the national data in this current period. Employment is an area with complex data, showing labor quality is the lone issue where Ohio was meaningfully different from the U.S. overall.

“Across a range of industries, Ohio small businesses are working hard to keep up with their customers’ demands and are reporting on par with other small businesses nationwide,” said Jared Weiser, NFIB Ohio State Director. “The main area of concern for Main Street is hiring, and specifically, finding qualified workers is a top challenge for small employers.”

Ohio’s Small Business Optimism Index

Following two periods above the national average, Ohio’s Small Business Optimism Index fell to 98.3, fractionally behind the U.S. data at 98.5. Both readings remain above the national average of 98.0.

• Profits are trending in the right direction, with a 7-point overperformance in Ohio compared to the U.S.
• Sales expectations were less positive, with Ohio scoring 6 points worse than the U.S.

Business Health

When asked about the health of their business, Ohio small business owners reported a similar rating as the national average.

• In Ohio, there were 4 percentage points fewer small business owners who identified their businesses’ health as “Good.”
• Instead, 3 percentage points more identified their business health as “Excellent.”

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.

The current data signals the Ohio small business job market is fairing worse than the U.S. overall, with the Ohio Index coming in 2.2 points weaker (99.4 vs. 101.6).

• However, data of the past decade shows much more volatility for the Ohio Index relative to the U.S. data.
• The data shows that Ohio businesses had previously expected to hire more and give out more raises than they ended up actually doing.

Uncertainty Index

Over the past 18 months, uncertainty has been a major concern for small businesses, with a spike that has comfortably exceeded past records. Ohio’s Uncertainty Index closely paralleled the U.S. data and declined over the previous two periods.

Single Most Important Business Problem

Only one issue has a big enough gap between Ohio’s data and the national numbers: Labor quality, which is 5 points worse in Ohio than in the U.S. overall. While it is the top issue in both geographies, it is much more pronounced in Ohio than in the rest of the country.

View the full report here.