Small Business Optimism Reaches Lowest Level Since 2012

The National Federation of Independent Business (NFIB) Small Business Optimism Index decreased by 0.9 of a point in March to 88.5, the lowest level since December 2012. This is the 27th consecutive month below the 50-year average of 98. The net percent of owners raising average selling prices rose seven points from February to a net 28 percent seasonally adjusted.

“Small business optimism has reached the lowest level since 2012 as owners continue to manage numerous economic headwinds,” said Bill Dunkelberg, chief economist for NFIB. “Inflation has once again been reported as the top business problem on Main Street and the labor market has only eased slightly.”

Key findings include:

  • The net percent of owners who expect real sales to be higher decreased eight points from February to a net negative 18 percent (seasonally adjusted).
  • Twenty-five percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs), up two points from February.
  • Owners’ plans to fill open positions continue to slow, with a seasonally adjusted net 11 percent planning to create new jobs in the next three months, down one point from February and the lowest level since May 2020.
  • Seasonally adjusted, a net 38 percent reported raising compensation, up three points from February’s lowest reading since May 2021.
  • As reported in NFIB’s monthly jobs report, 37 percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period. A net 21 percent (seasonally adjusted) plan to raise compensation in the next three months, up two points from February. The percent of small business owners reporting labor quality as their top small business operating problem rose two points from February to 18 percent. Labor cost reported as the single most important problem for business owners decreased by one point to 10 percent, only three points below the highest reading of 13 percent reached in December 2021.

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. This survey was conducted in March 2024.

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