Rushmore State News

The NFIB Small Business Optimism Index saw a notable increase in December, rising by 3.4 points to reach 105.1. This marks the second consecutive month that the index has been above its 51-year average of 98 and represents the highest reading since October 2018. Out of the ten components that make up the Optimism Index, seven showed an increase, two decreased, and one remained unchanged. The Uncertainty Index also saw a decline of 12 points, bringing it down to 86.

NFIB Chief Economist Bill Dunkelberg commented on this trend: “Optimism on Main Street continues to grow with the improved economic outlook following the election.” He added that small business owners are feeling more certain and hopeful about the new administration's economic agenda, with expectations for economic growth, lower inflation, and positive business conditions on the rise due to anticipated pro-business policies.

Jason Glodt, NFIB South Dakota State Director, echoed these sentiments by noting that “this report highlights how small business owners nationwide are encouraged by the improved outlook.” He expressed hope that South Dakota's Legislature would seize this opportunity to pass legislation favorable to small businesses.

Key findings from the report include a significant rise in the net percentage of owners expecting economic improvement—up 16 points from November to a net 52%, marking the highest level since late 1983. Additionally, there was an increase in those believing it is a good time to expand their business, reaching its highest point since February 2020.

In terms of sales expectations, there was an eight-point rise in those anticipating higher real sales volumes. Inventory investment plans also saw an uptick with a net six percent planning investments in upcoming months—the highest since December 2021.

On compensation trends, a net twenty-nine percent reported raising compensation levels—a decrease from November—and plans for future raises also dipped slightly. Inflation remains a concern for many small business owners; twenty percent cited it as their primary issue when operating their businesses.

Employment challenges persist as well; thirty-five percent of small business owners reported unfilled job openings in December despite active hiring efforts. Capital outlays were reported by fifty-six percent of owners over six months leading up to December—an increase from November—with expenditures focused primarily on equipment and vehicles.

Overall profit trends remain challenging with reports indicating no change from November’s figures where weaker sales were frequently cited as contributing factors among those experiencing lower profits.

The NFIB Research Center has been collecting data on Small Business Economic Trends through quarterly surveys since late 1973 and monthly surveys since 1986. This particular survey was conducted in December 2024 and is released monthly on every second Tuesday.