Hawkeye Reporter

The National Federation of Independent Business (NFIB) has released its latest Small Business Optimism Index, which fell by 2.3 points in January to 102.8. This marks the third consecutive month above the 51-year average of 98. However, the Uncertainty Index rose by 14 points to reach 100, marking the third highest recorded reading after two months of decline.

"Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise," said NFIB Chief Economist Bill Dunkelberg. He noted that hiring challenges continue to frustrate Main Street owners as they struggle to find qualified workers for open positions and that fewer businesses plan capital investments as they prepare for the months ahead.

In Iowa, NFIB State Director Matt Everson commented on specific challenges facing local businesses: "For Iowa’s small business community, this pricing pressure, combined with 18% of owners citing inflation as their top concern, signals ongoing challenges in maintaining profitability while serving our agricultural and manufacturing base." Everson emphasized that "Main Street needs pro-small business policies and tax relief now more than ever."

Key findings from the report include a five-point drop in the net percent of owners expecting economic improvement since December to a net 47%, seasonally adjusted. Inflation remains a significant issue with eighteen percent of owners identifying it as their primary problem—a figure matching labor quality concerns.

Thirty-five percent of all owners reported job openings they could not fill during January—unchanged from December—with many citing few or no qualified applicants available. Additionally, twenty percent plan capital outlays in the next six months—a decrease of seven points from December.

The report also indicated a slight decrease in financing difficulties among small businesses. A net three percent reported their last loan was harder to obtain compared to previous attempts—the lowest level since June 2022.

The NFIB Research Center has been collecting Small Business Economic Trends data through quarterly surveys since late 1973 and monthly surveys since 1986. Survey participants are randomly selected from NFIB's membership base and reports are published monthly on the second Tuesday.