Small Business Job Opportunities Hit Lowest Point Since July 2020, according to NFIB

Small Business Job Openings See Third Consecutive Monthly Decrease, According to NFIB Report

Small business job openings have seen a third consecutive monthly decrease, according to the August jobs report from the National Federation of Independent Business (NFIB). The report indicates a net 15% of owners plan to create new jobs in the next three months, marking a decrease from the previous month.

One of the key findings in the report is the decrease in job openings across most sectors. The year-over-year comparison shows job openings down significantly in transportation and construction, with the steepest declines being recorded in these industries. However, demand for workers slightly increased in the services sector.

In August 2025, the percentage of small businesses with job openings in manufacturing was 41 percent, a decrease from 47 percent in August 2024. The construction sector also saw a significant drop, with 49 percent of small businesses reporting job openings, down from 60 percent in the same month the previous year.

The wholesale sector also experienced a decrease, with 20 percent of small businesses reporting job openings in August 2025, down from 38 percent in August 2024. On the other hand, the services sector saw a slight increase, with 37 percent of small businesses reporting job openings, up from 35 percent in the same month the previous year.

The report also highlights the struggle small business owners are facing in finding qualified applicants. Many small business owners with job openings are reporting labor quality as their single most important problem. In August, 21% of small business owners cited labor quality as their top concern, unchanged from July.

Bill Dunkelberg, Chief Economist at NFIB, stated that small businesses are scaling back on job openings despite the economy doing well. He further explained that the labor market is tight, and small businesses are finding it difficult to find qualified applicants.

Rosemary Elebash, NFIB State Director, stated that the conditions in Alabama mirror the national trends. The job market situation in Alabama in 2025 for the transportation and construction sectors shows growth and demand for workers, driven by investments in public transit and infrastructure. However, some states face labor shortages leading to regulatory changes allowing younger workers in construction roles, which might reflect trends in Alabama as well.

Contracts and labor negotiations in related manufacturing sectors indicate wage increases and job security improvements, suggesting positive labor market conditions overall for these industries. Openings for skilled workers stood at 28% in August, down one point, while openings for unskilled labor rose to 13%, up one point.

In August, 53% of small business owners reported hiring or trying to hire, down four points from July. Among those, 32% of small business owners reported job openings they couldn't fill, down one point from July. The percentage of small businesses with job openings in agriculture was 25 percent, a slight decrease from 28 percent in August 2024. The finance sector also saw a significant decrease, with 18 percent of small businesses reporting job openings, down from 28 percent in August 2024.

A net 29% of small businesses reported raising compensation in August, up two points from July. Another 20% plan to raise compensation in the next three months, up three points. Despite the challenges, small businesses are taking steps to address the labor shortage by offering higher wages and improved job security.

The August jobs report from NFIB shows a decrease in small business job openings to their lowest level since July 2020. The report provides valuable insights into the current state of the labor market and the challenges small businesses are facing in finding qualified workers.