The National Federation of Independent Business (NFIB) reported on Feb. 11 that its Small Business Optimism Index fell by 2.3 points in January to 102.8, marking the third consecutive month above the long-term average of 98. The Uncertainty Index rose sharply by 14 points to reach 100, which is the third highest level recorded.
The findings highlight growing uncertainty among small business owners despite continued optimism about future conditions. The data suggests that while many businesses remain hopeful, they are also facing significant challenges related to hiring and cost management.
NFIB Chief Economist Bill Dunkelberg said, “Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise.” He added, “Hiring challenges continue to frustrate Main Street owners as they struggle to find qualified workers to fill their many open positions. Meanwhile, fewer plan capital investments as they prepare for the months ahead.”
Jason Glodt, NFIB South Dakota State Director, commented on sector-specific pressures: “The retail sector’s price hike reflects the ongoing adjustments our Main Street businesses are making to make ends meet. South Dakota small business owners are demonstrating resilience while navigating these market pressures; however, the Legislature can give them a much-needed boost by reforming property taxes and passing bills that will help lower costs.”
Key findings from the report include a five-point drop in the net percentage of owners expecting economic improvement and an unchanged rate of job openings that could not be filled at 35%. Inflation and labor quality were tied as top concerns for business owners at 18% each. Plans for capital outlays in the next six months dropped seven points from December.
Other notable results show that compensation increases are planned by a net 20% of respondents over the next three months and that profit trends remain negative overall. The frequency of price hikes was highest in finance and retail sectors.
The NFIB Research Center has been collecting Small Business Economic Trends data since 1973 through quarterly surveys and monthly surveys since 1986. The most recent survey was conducted in January.
