RALEIGH — Small businesses across the country continue to face a tight labor market, with hiring demand rising even as employers report difficulty finding qualified workers, according to the latest jobs report from the National Federation of Independent Business (NFIB).
NFIB’s February Small Business Employment Index increased nearly one point to 103.5, climbing above both last year’s average and the long-term historical norm. The reading is 2.3 points higher than the 2025 average of 101.2 and 3.5 points above the historical average of 100.
The report suggests that while small businesses remain eager to expand their workforce, filling open positions continues to present challenges.
“February’s numbers show a growing tightness in the small business labor market,” said NFIB Chief Economist Bill Dunkelberg. “While the overall market remains in balance, employers need more skilled workers to fill open positions.”
In February, 33% of small business owners reported job openings they could not fill, a two-point increase from January and well above the historical average of 24%. Demand was strongest for skilled workers, with 28% of employers reporting openings for skilled positions — up three points from the previous month. Openings for unskilled labor remained unchanged at 10%.
Gregg Thompson, NFIB’s state director in North Carolina, said the national trends mirror what many employers in the state are experiencing.
“Our members say they’re ready to hire, but a lot of them say it’s still a struggle to find people with the skills and experience they’re looking for,” Thompson said.
Overall hiring activity increased during the month. Fifty-four percent of small business owners reported hiring or attempting to hire in February, up four points from January. However, many employers say the pool of qualified candidates remains thin.
Forty-six percent of business owners who were hiring said they received few or no qualified applicants. Twenty-five percent reported receiving few qualified applicants, while 21% said they received none.
Looking ahead, hiring expectations cooled slightly. A net 12% of small business owners said they plan to create new jobs over the next three months, down four points from January but still near the long-term average of 11%.
Compensation pressures also remain elevated. A net 34% of small business owners reported raising wages in February, up two points from January and the highest level since March 2025. Another 22% plan to increase pay in the coming months.
Despite the ongoing hiring challenges, concerns about labor quality have eased slightly. Fifteen percent of owners cited labor quality as their top business problem in February, marking the fourth consecutive monthly decline. Labor costs, meanwhile, remained steady at 9%.
