Small Business Outlook 2027: Headwinds and Tailwinds From the Latest Surveys

The short answer is that America's small businesses head into 2027 pulled in two directions at once. The National Federation of Independent Business (NFIB) reports optimism slipped to 97.9 in September, a touch below its 52-year average of 98.0, while its uncertainty gauge sits at 90 against a historical norm of 68. Owners name the same two problems they have named all year: finding good workers, which 26% call their single biggest issue, and inflation, cited by 20%, up 4 points in a month. Yet hiring plans remain above average, and nearly 535,000 Americans filed to start a business in September — almost twice the 2019 pace. Not a boom and not a bust: a tug of war. Three forces on each side will decide which way it tips.

Headwind 1: Workers are still hard to find

Labor quality or availability was the top reported problem for the third consecutive month, rising 3 points to 26% of owners in September, according to NFIB's survey released October 13. A seasonally adjusted 32% of owners reported job openings they could not fill — down 3 points from August but still 8 points above the historical average.

The Federal Reserve's October Beige Book, released October 14 and based on information gathered through October 5, adds texture: in five of the twelve districts, some firms reduced staff through attrition, postponed hiring, or expected to create fewer jobs after AI-related productivity investments. Demand for workers has not disappeared; the binding constraint is finding the right people, and some employers are choosing to do more with the teams they already have.

Headwind 2: Inflation is climbing back up the worry list

Twenty percent of owners named inflation their single most important problem in September, up from 16% in August. The historical average is 7%, so this reading remains firmly elevated. A net 31% of owners raised selling prices, and a net 31% plan further increases.

But passing costs through is getting harder. The October Beige Book found three districts reporting "robust" price growth, up from one in the prior report, with four more saying price increases had picked up. Firms told the Fed they expect prices to rise further in coming months as contracts come up for renewal, with elevated diesel prices moving through supply chains via fuel surcharges. Consumer-facing businesses, however, reported thinner margins: price-sensitive customers are resisting increases, forcing selective price moves, targeted promotions, and menu changes instead of across-the-board hikes.

Headwind 3: Borrowing is getting more expensive again

A net 8% of owners paid a higher interest rate on their most recent loan — the most since June 2025 — and the average short-term borrowing rate climbed 0.7 points to 8.2%, per analysis of the September NFIB data. With the Uncertainty Index at 90 versus a norm near 68, expansion and investment plans are the natural casualties: it is hard to commit capital when the range of possible outcomes feels this wide.

Note what this is not: a forecast of where rates go next. For the scenarios behind the rate path itself, see this blog's earlier post "Interest Rate Outlook: Scenarios, Not Predictions."

Tailwind 1: Owners still plan to hire

Here is the number that keeps the optimists in the game: hiring plans held at a net 17% in September, unchanged from August and 6 points above the long-run average of 11%. Owners want to add people.

The catch is that actual hiring is not following the plans. The share of owners hiring or trying to hire fell 5 points to 51%, a net 7% cut employment over the past three months, and the employment index slipped to 100.6, below its 2025 average of 101.2. The gap between hiring intentions and hiring reality is the single most important thing to watch into 2027 — it will close either because conditions improve or because plans get cut.

Tailwind 2: New businesses keep forming

Census Bureau data released October 14 recorded 534,947 seasonally adjusted business applications in September — about 4% higher than a year earlier and roughly 1.8 times the monthly pace of 2019. The Bureau projected about 29,000 of those applications would become employer businesses within four quarters, up 1.4% from the August projection.

One honest caveat: applications are not businesses. The count starts with tax-ID filings, and most never become employers. Still, as a measure of entrepreneurial intent, the series has held near record levels for years — a steady tailwind even while established firms report strain.

A 2027 decision frame for owners, not a prediction

Surveys describe conditions; they do not tell any single business what to do. Three checks translate the data above into planning questions:

1. Hiring: budget for the gap. Plans say hire, but unfilled openings and attrition-based restraint mean positions stay open longer. If growth in 2027 depends on filling roles quickly, the plan needs a longer timeline or a smaller team doing more.

2. Pricing: test pass-through in small steps. A net 31% of owners are raising prices, but customer resistance is rising with them. The Beige Book's message is clear: selective increases and cost-trimming beat blanket hikes when buyers push back.

3. Borrowing: price decisions at today's rates. With the average short-term rate at 8.2% and uncertainty far above normal, a project that only works on cheap credit does not work yet. Run the numbers at current rates before committing.

The tug of war will be resolved by data, not by this post. The next NFIB survey, the next Beige Book, and the next round of business formation figures will show which side is winning — and the owners watching all three will see it first.

Sources: NFIB Small Business Economic Trends, September 2026 (released October 13, 2026); Piedmont Crescent Capital analysis of the September NFIB report (borrowing costs, hiring plans, price data); NFIB September survey detail (expectations, unfilled openings); Federal Reserve community perspectives on the October 2026 Beige Book (small business financial strain); October 2026 Beige Book price-growth summary; Beige Book on AI-related hiring restraint in five districts; Census Bureau Business Formation Statistics, September 2026; on what business applications do and do not measure.

General information only — not business or financial advice. Consider speaking with a qualified professional about decisions for your own business.