The National Federation of Independent Business (NFIB) reported on Mar. 11 that its Small Business Optimism Index fell by 0.5 points in February to 98.8, though it remained slightly above the long-term average of 98. The Uncertainty Index also decreased by three points from January, reaching a level of 88.
The monthly report is significant as it provides insight into the economic outlook and challenges faced by small businesses across the country and in Iowa. The findings help policymakers and business leaders understand current trends affecting Main Street firms.
Bill Dunkelberg, NFIB Chief Economist, said, “Although optimism declined slightly, small businesses report feeling more certain in February as they look toward the coming months.” He added, “High sales and increased profits made February a more positive month for many owners, but competition from large businesses is putting stress on Main Street firms as they navigate the current economic climate.”
Logan Shine, NFIB Iowa State Director, commented on the results: “The national Uncertainty Index fell three points in February, which is a positive sign for Iowa’s small businesses. If we want this trend to continue, the Legislature should prioritize property tax reform and cutting red tape, so Main Street has what it needs to grow and remain competitive.”
Key findings from the report include an increase in the Employment Index to 103.5—above both its historical average and last year’s average—driven mainly by compensation-related factors rather than employee counts. Labor quality concerns among owners have continued to decline for four consecutive months. Actual sales gains were at their highest since May 2022; however, expectations for future sales volumes dropped sharply compared to January.
Other notable data show that supply chain disruptions affected fewer businesses than before; price increases slowed for a third straight month but remained above historical averages; and reports of positive profit trends reached their highest point since December 2021. Competition from large businesses was cited as a growing concern among owners.
The NFIB Research Center has collected Small Business Economic Trends data through quarterly surveys since late 1973 and monthly surveys since 1986. The latest survey was conducted in February with randomly selected members.
