NFIB survey shows small business optimism remains above long-term average

FOX23 News at 9 p.m

JEFFERSON CITY, Mo., (KBSI) — Small business optimism remained above its long-term average in January despite a slight dip, according to a new survey released by the National Federation of Independent Business.

The NFIB Small Business Optimism Index fell 0.2 points in January to 99.3, remaining above its 52-year average of 98. Of the 10 components that make up the index, three increased and seven declined. Expected real sales volume saw the most significant change, rising 6 points. The NFIB Uncertainty Index increased 7 points from December to 91, driven largely by more owners reporting uncertainty about whether it is a good time to expand their businesses.

“While GDP is rising, small businesses are still waiting for noticeable economic growth,” said NFIB Chief Economist Bill Dunkelberg. “Despite this, more owners are reporting better business health and anticipating higher sales.”

NFIB Missouri State Director Brad Jones said small business owners remain cautiously optimistic but hesitant to make major expansion decisions.

“Many of our members are in a wait-and-see mode when it comes to expanding their business,” Jones said. “Removing the risk of lawsuit abuse will help strengthen confidence in Missouri’s business and legal environment.”

Jones pointed to recent action in the Missouri House advancing legislation aimed at curbing lawsuit abuse and urged the Senate to pass the measure.

The report also highlighted the new NFIB Small Business Employment Index, which measures labor market conditions. The index stood at 101.6 in January, about 1.5 points above its historical average, suggesting a relatively balanced labor market.

Other key findings from the January survey include:

• Thirteen percent of owners cited the cost or availability of insurance as their most important problem, the highest level since December 2018.
• Sixty percent reported making capital outlays in the past six months, the highest level since November 2023.
• A net negative 6% reported paying a higher interest rate on their most recent loan, suggesting easing credit conditions.
• Sixteen percent cited labor quality as their most significant problem, marking the third consecutive monthly decline.
• A net 16% expect higher real sales volumes in the next quarter.
• Price increases remain elevated, with a net 26% reporting higher selling prices and 32% planning to raise prices in the next three months.
• Thirty-one percent reported job openings they could not fill, remaining above the historical average.

NFIB said overall business health improved in January, with more owners rating their business as excellent and fewer rating it as fair. The survey was conducted in January and is part of NFIB’s ongoing Small Business Economic Trends report, released monthly.