Minnesota State Wire

The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index dropped by 2.0 points in September, reaching 98.8. This marks the first decline in three months, although the index remains above its long-term average of 98. The Uncertainty Index increased by seven points to 100, which is among the highest readings in more than five decades.

Bill Dunkelberg, NFIB Chief Economist, commented on the findings: “Optimism among small business owners decreased in September. While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges. Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations.”

Jon Boesche, NFIB Minnesota State Director, addressed state-specific concerns: “Labor quality and taxes are tied as the number one problem for Minnesota’s small businesses. Lawmakers must heed this warning and cut unnecessary taxes and burdensome regulations if they want Minnesota’s economy to improve.”

The survey highlighted several ongoing challenges for small businesses. Supply chain disruptions and inflation were significant issues, with 64% of owners reporting some impact from supply chain problems—an increase from August. The proportion of owners raising average selling prices rose to a net 24%, and 31% plan to increase prices in the coming months.

Inflation was cited as the most important problem by 14% of respondents, up from August. Labor quality and taxes were both identified as the top single most important problems by 18% of owners.

In terms of hiring, 32% of small business owners reported job openings they could not fill, unchanged from August. Among those hiring or trying to hire, 88% noted a lack of qualified applicants. Hiring plans are at their highest level since January, with a net 16% planning to create new jobs.

Labor costs also rose as a concern, with 11% of owners naming it as their top issue. Compensation increases were reported by a net 31% of respondents, while 19% plan to raise compensation in the next three months.

Capital investment remained subdued; 56% of owners reported capital outlays in the past six months, and only 21% plan such spending in the next six months—a historically weak figure.

Sales trends showed that more firms experienced declining sales than gains, though actual earnings changes improved slightly to their highest level since December 2021.

Access to credit became more challenging for some owners; 7% said their last loan was harder to obtain than previous attempts, and interest rates on short-term loans averaged 8.8% in September.

Business health assessments were mostly stable, with 11% rating their business as excellent and 57% as good.

The NFIB Research Center has been collecting economic trends data from small businesses since 1973 through quarterly and monthly surveys of its membership. The most recent survey was conducted in September 2025 and is released monthly.