In NFIB’s August survey, 40 percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up 2 points from July. Thirty-six percent have openings for skilled workers (up 4 points) and 15 percent have openings for unskilled labor (down 1 point). The difficulty in filling open positions is particularly acute in the transportation, construction, and manufacturing sectors. Job openings in construction were up 5 points from last month and over half of the firms (60 percent) have a job opening they can’t fill. Openings were the lowest in the agriculture and finance sectors. A seasonally adjusted net 13 percent of owners plan to create new jobs in the next three months, down 2 points from July. Overall, 62 percent reported hiring or trying to hire in August, up 5 points from July. Fifty-six percent (90 percent of those hiring or trying to hire) of owners reported few or no qualified applicants for the positions they were trying to fill (up 7 points and the highest since September 2023). Thirty-one percent of owners reported few qualified applicants for their open positions (up 2 points) and 25 percent reported none (up 5 points). Reports of labor quality as the single most important problem for business owners rose 2 points from the previous month to 21 percent. Labor cost reported as the single most important problem for business owners was unchanged at 9 percent.

Fifty-six percent reported capital outlays in the last six months, up 2 points from July. Of those making expenditures, 40 percent reported spending on new equipment (up 4 points), 21 percent acquired vehicles (down 1 point), and 18 percent improved or expanded facilities (up 3 points). Eleven percent spent money on new fixtures and furniture (up 1 point) and 5 percent acquired new buildings or land for expansion (down 2 points). Twenty-four percent (seasonally adjusted) plan capital outlays in the next six months, up 1 point from July. A more positive view of the future economy and economic policy would help stimulate longer term investment spending, but currently owners’ views about the future are not supportive and financing costs are very high. Investment is needed to address labor supply chain problems which still persist in the current environment.

The net percent of owners raising average selling prices fell 2 points from July to a net 20 percent seasonally adjusted. Twenty-four percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs), down 1 point from July. Unadjusted, 15 percent (up 2 points) reported lower average selling prices and 34 percent (down 2 points) reported higher average prices. Price hikes were most frequent in the finance (52 percent higher, 3 percent lower), retail (47 percent higher, 8 percent lower), construction (33 percent higher, 16 percent lower), and manufacturing (33 percent higher, 7 percent lower) sectors. Seasonally adjusted, a net 25 percent plan price hikes in August (up 1 point).

Three percent of owners reported that all their borrowing needs were not satisfied, up 1 point from July. Twenty-six percent reported all credit needs met (up 1 point) and 60 percent said they were not interested in a loan (down 2 points). A net 7 percent reported their last loan was harder to get than in previous attempts (up 1 point). Overall, credit markets remain friendly toward small businesses. Four percent reported that financing was their top business problem in August (up 1 point). A net 15 percent of owners reported paying a higher rate on their most recent loan, unchanged for the third consecutive month. The average rate paid on short maturity loans was 9.5 percent, up 0.1 of a point from July. Twenty-seven percent of all owners reported borrowing on a regular basis, unchanged from July.

Seasonally adjusted, a net 33 percent reported raising compensation, unchanged from July and remaining the lowest reading since April 2021. A seasonally adjusted net 20 percent plan to raise compensation in the next three months, up 2 points from July. The frequency of reports of positive profit trends was a net negative 37 percent (seasonally adjusted), 7 points worse than in July and the lowest since March 2010. Among owners reporting lower profits, 31 percent blamed weaker sales, 17 percent blamed the rise in the cost of materials, 13 percent cited labor costs, and 10 percent cited lower selling prices. For owners reporting higher profits, 45 percent credited sales volumes, 35 percent cited usual seasonal change, and 10 percent cited higher selling prices.

A net negative 16 percent of all owners (seasonally adjusted) reported higher nominal sales in the past three months, unchanged from July. The net percent of owners expecting higher real sales volumes fell 9 points to a net negative 18 percent (seasonally adjusted). Real sales volume expectations were the largest contributor to the decline in the Optimism Index. The net percent of owners reporting inventory gains was unchanged at a net negative 9 percent, seasonally adjusted. Not seasonally adjusted, 11 percent reported increases in stocks (unchanged) and 18 percent reported reductions (up 1 point). A net negative 5 percent (seasonally adjusted) of owners viewed current inventory stocks as “too low” in August, down 1 point from July. A net negative 1 percent (seasonally adjusted) of owners plan inventory investment in the coming months, down 3 points from July (more plan to draw down stocks than add to them).