Small-Business Optimism Takes a Dip in September 2025

Small-business owners are showing signs of increasing caution. The NFIB’s Small Business Optimism Index for September 2025 came in at 98.8, marking a 2.0-point decline from August. While that level sits just above the historic 52-year average of 98, the drop signals shifting sentiment among independent firms. What’s driving the pullback? Let’s explore the findings together.

According to the survey, there are two factors that stand out: fewer owners expecting better conditions ahead, and increasing inventory concerns. The report points out that “those expecting better business conditions in the next six months” dropped significantly, while a rising share of owners said their inventories were “too low” or shifting — contributing to the overall decline. Meanwhile, the survey’s Uncertainty Index jumped 7 points in September to 100 (its fourth-highest reading in over 50 years), reflecting heightened business owner uncertainty.

Employment & Hiring: A Mixed Picture

On one hand, the hiring environment remains tight for many small firms. In September, 32 percent of owners reported job openings they could not fill — unchanged from August. Skilled-worker openings were at 28 percent, and unskilled at 13 percent. On the other hand, hiring plans are improving modestly: a net 16 percent of owners plan to create new jobs in the next three months (up 1 point from August) and this is the highest level since January. Of note: 58 percent of owners reported hiring or trying to hire in September (up 5 points), but among those, 88 percent said they had few or no qualified applicants (up 7 points). Labor remains a top challenge: 18 percent cited labor quality as their single most important problem (tying with taxes) and 11 percent cited labor costs (up 3 points). For small-business owners, that means while they want to hire, finding the right people remains a headache — and that constraint could blunt growth.

Capital Spending, Sales & Inventories: Weak Spots

Capital outlays in the last six months were reported by 56 percent of owners — unchanged from August. Among those spending, 42 percent acquired new equipment (up 5 points); 22 percent purchased vehicles; 14 percent improved or expanded facilities. But planning was weak: just 21 percent plan to make capital expenditures in the next six months — described by NFIB as “a historically weak reading.”  On the sales front: a net -7 percent of owners reported higher nominal sales in the past three months (though this was up 2 points from August). The net expecting higher real sales in the next three months fell 4 points to +8 percent. Inventory concerns are showing up: the net percent of owners viewing current stocks as “too low” plunged 7 points in one month — the largest monthly drop in the survey’s history. Also, 64 percent of small-business owners reported some impact from supply-chain disruptions (up 10 points). All told, the data suggest many small firms are wrestling with weaker sales momentum and cautious capital investment — even as they try to hold onto lean staffing.

Pricing, Profits & Credit Conditions

Inflation and pricing pressures remain real. In September, the net percent of owners raising average selling prices rose 3 points from August to 24 percent, well above the monthly average of 13 percent. Looking ahead three months, a net 31 percent of owners plan to increase prices (up 5 points). Profit trends are still under pressure: a net −16 percent of owners reported positive profit trends, though this is the least negative reading since December 2021. Among owners reporting lower profits, 33 percent blamed weaker sales, 17 percent materials cost increases, 10 percent price changes, and 9 percent labor costs. Borrowing conditions are also tightening: a net 7 percent of owners said their last loan was harder to get (up 4 points) and net 7 percent reported paying a higher interest rate on their most recent loan (up 1 point). The average short-term rate stood at 8.8 percent in September (up 0.7 points).

What It Means for Small Business Owners

For small-business owners like you, it remains a decent time to operate (optimism remains near average), but the decline signals increasing caution. Hiring remains a priority, but finding qualified talent continues to be difficult — meaning you may need to widen your recruiting efforts or invest in training. Weak sales growth and cautious real-sales expectations mean firms should monitor inventory carefully and avoid heavy pre-season over-stocking.

Capital investment plans are weak: if you’ve planned to upgrade equipment or facilities, do it thoughtfully — timing and ROI matter more than ever. Price increases remain on the table, but earnings remain squeezed: pricing strategy and cost control must go hand in hand. And finally, tightening credit and rising borrowing rates mean it’s a good time to review your financing strategy and consider locking in favorable terms if you anticipate expansion.

Keep in mind that the Financial Pantry is a prime spot for the latest trends and regulations that small business owners should know. Head over to ARF Financial and get the tools, resources, and financial assistance you need to succeed in this business landscape. If you’ve got big plans for your business, we have financing that’s the perfect fit!