HONOLULU, July 8, 2025—The latest Small Business Optimism Index from the National Federation of Independent Business (NFIB) has indicated a slight decrease in optimism among small business owners, as the index edged down 0.2 points to 98.6 in June.
This figure remains slightly above the 51-year average of 98 and reflects an unwavering resilience among entrepreneurs in Hawaii and across the nation.
Michael Iosua, Hawaii State Director of NFIB, noted the significance of the recent permanence of the 20% Small Business Deduction in influencing business decisions.
“With this deduction now permanent and state policies set for the year, entrepreneurs have clearer insights into hiring new employees or making necessary equipment purchases,” he stated.
The NFIB Small Business Optimism Index is recognized as a key gauge of the health of the small business sector, utilized by policymakers including the Federal Reserve and state legislatures nationwide.
According to NFIB Chief Economist Bill Dunkelberg, while optimism levels have stabilized, uncertainties in the economic environment appear to be diminishing.
“Taxes continue to be the primary concern among small business owners, but there are also growing worries regarding labor quality and elevated labor costs,” he said.
Key findings from the latest index reveal that the net percentage of business owners anticipating improved conditions dipped to 22% in June, a three-point decrease from May. Historically, this remains a favorable outlook compared to the 51-year average of only 3%.
Additionally, the expectation for higher real sales volumes also fell by three points to 7%. However, the feedback surrounding labor quality has remained steady, with 16% of small business owners identifying it as the most pressing issue.
This unchanged figure from May marks a recognition that the labor market might be stabilizing, given that concerns over labor quality have not fluctuated below 16% since April 2020.
Inflation, which has burdened small enterprises, is reportedly becoming less of a crisis, as only 11% of owners pointed to it as their top challenge in June—this is three points down from last month and represents the lowest concern regarding inflation since September 2021.
As inflationary pressures recede, many small business owners in Hawaii are expressing cautious but hopeful sentiments about the future.
For ongoing updates about small businesses in Hawaii, interested parties can visit www.nfib.com or follow NFIB Hawaii on X @NFIB_HI.
With over 80 years of advocacy on behalf of small and independent business owners, NFIB stands firm in its commitment to supporting this critical sector in both Washington, D.C. and all 50 state capitals. Founded in 1943, NFIB operates as a nonprofit, nonpartisan member-driven association dedicated exclusively to the interests of small and independent businesses. For further information, please visit nfib.com.
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