Rushmore State News

The NFIB Small Business Optimism Index saw a slight decline in June, dropping by 0.2 points to 98.6, which remains above the long-term average of 98. The decrease was largely due to an increase in respondents reporting excess inventories. Meanwhile, the Uncertainty Index fell by five points from May 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."

Jason Glodt, NFIB South Dakota State Director, commented on the situation: "South Dakota’s small business landscape is stable, yet the increase in tax concerns highlights a pressing need for reform." He noted that recent congressional action made the 20% Small Business Tax Deduction permanent, preventing a significant tax hike for small business owners.

Key findings from the report include:

- A net negative 5% of owners viewed current inventory stocks as "too low" in June.

- The net percent of owners expecting better business conditions dropped three points to a net 22%.

- Owners expecting higher real sales volumes also fell three points to a net 7%.

- Capital outlays planned for the next six months decreased slightly.

- Labor quality remained a concern for 16% of small business owners.

- Inflation as a primary problem decreased to its lowest since September 2021.

The report highlighted issues such as job openings remaining unfilled and rising compensation costs. A seasonally adjusted net 13% of owners plan to create new jobs soon.

Labor costs were cited as an increasing problem, with compensation reports showing significant rises since January 2020. Despite this, fewer capital outlays were reported compared to previous months.

Sales challenges persisted with poor sales reported by some businesses and inventory gains declining slightly from May figures.

Price increases were planned by more businesses than before, reflecting ongoing adjustments within the market environment.

Profit trends showed improvement over May figures but continued challenges due to weaker sales and rising material costs.

Financing issues were less prominent compared to other concerns like taxes and competition from larger businesses.

Overall health assessments indicated deterioration among some respondents' businesses despite improvements in certain areas like expansion plans and borrowing rates.

This survey was conducted by NFIB's Research Center in June 2025 with data collected monthly since 1986 and quarterly since late 1973.