Minnesota State Wire

The NFIB Small Business Optimism Index showed little change in June, decreasing slightly by 0.2 points to 98.6, which remains above the 51-year average of 98. An increase in respondents reporting excess inventories largely influenced this decline. Meanwhile, the Uncertainty Index dropped by five points to 89.

"Small business optimism remained steady in June while uncertainty fell," said NFIB Chief Economist Bill Dunkelberg. "Taxes remain the top issue on Main Street, but many others are still concerned about labor quality and high labor costs."

In Minnesota, optimism is still above historical averages, according to NFIB Minnesota State Director Jon Boesche. However, he noted an increase in taxes as a primary concern for small business owners: "Thankfully, Congress recently made the 20% Small Business Deduction permanent. It’s crucial for Minnesota policymakers to continue addressing these issues to ensure the success of our Main Street businesses."

Key findings from the report include a net negative 5% of owners viewing current inventory stocks as "too low," indicating a net increase in inventories. The percentage expecting better business conditions fell three points to a net 22%, though it remains positive historically compared to a long-term average of a net 3%.

The number of small business owners planning capital outlays in the next six months decreased slightly to 21%. Labor quality concerns remained at 16%, unchanged from May.

Inflation was cited as the single most important problem by only 11% of owners, down three points from May and marking its lowest level since September 2021.

The overall health of businesses saw some deterioration; only 8% reported their business as excellent (down six points), and those reporting good health also declined.

A seasonally adjusted net percentage reported job openings they could not fill rose slightly to 36%. A total of 58% were hiring or trying to hire during June, with most citing few or no qualified applicants.

Reports indicate that labor costs increased one point to be identified as the main issue by business owners at a rate of 10%. Compensation reports showed an upward trend with a seven-point increase from May.

Business expansion plans remained modestly low with only an incremental rise observed over recent months. Taxes continue being highlighted as the foremost challenge faced by small enterprises alongside consistent mentions regarding regulatory impacts and competition pressures from larger companies.

This survey conducted among NFIB members reflects economic trends within small businesses across various states including Minnesota where stakeholders urge further policy considerations ensuring continued viability amidst existing challenges facing local commerce environments today.