The National Federation of Independent Business (NFIB) Research Center released its second “State of the States” report, examining economic activity among Florida small businesses. The report shows that Florida has advantages over the country as a whole in three NFIB indices: optimism, employment and decreased uncertainty.
If we look at the main challenges facing small businesses in the state, insurance is a particular challenge, but taxes are a big plus in Florida.
“This report shows what Floridians already know: the Sunshine State is one of the best places to own, operate and grow a small business,” said Bill Herrle, NFIB Florida executive director. “While Florida small business owners face specific challenges like rising insurance costs, they still have an advantage thanks to our business-friendly tax climate.”
Optimism index
The Florida Optimism Index continues to show the state comfortably ahead of the U.S. overall, as it has for much of data history. In the current period, Florida’s optimism index stands at 100.3 compared to 98.5 in the US.
Looking at the underlying components, Florida outperforms the rest of the country in actual sales expectations (+16 points), while underperforming in earnings trends (-9 points).
When asked about the overall health of their businesses, Florida small business owners reported that they are performing moderately better than the rest of the country.
More small business owners reported the health of their business as “good” and fewer rated it as “fair.”
Employment rate
The new NFIB Employment Index incorporates six components related to hiring and compensation and turns them into a single number. A higher number means a tighter labor market where workers are harder to find and retain, and a lower number means a weaker labor market where hiring and retention are relatively easier.
Florida’s employment rate overall has remained close to the average for companies nationwide.
In the current period, Florida’s index rose to 103.7, 2.2 points higher than the national index.
Both nationally and in Florida, the labor market has tightened and owners continue to report difficulty finding qualified workers.
Uncertainty index
Uncertainty among Florida small business owners decreased dramatically this winter.
The significant drop in the uncertainty index is a positive development, as it was accompanied by gains in other key metrics.
Although the uncertainty index for the rest of the country also decreased, it generally remained high.
The most important problem
Florida small business owners are much happier with their tax situation than those in the rest of the country (7% of major problems in Florida vs. 17% in the US). However, the cost and quality of labor stand out as the main challenges for Florida’s small employers.
Labor challenges are the only concerns that are significantly worse in Florida than the rest of the states combined. Unfortunately, these metrics have also worsened more significantly than for the United States as a whole.
See the full report at https://tinyurl.com/4um5jhyp.
For more information about NFIB, visit nfib.com.