Rushmore State News

The National Federation of Independent Business (NFIB) released its Small Business Optimism Index for February, indicating a decline of 2.1 points to 100.7. This marks the fourth consecutive month the index remains above the 51-year average of 98, although it is still 4.4 points below its peak of 105.1 in December.

Bill Dunkelberg, NFIB Chief Economist, commented on the report, stating, "Uncertainty is high and rising on Main Street and for many reasons." He noted that fewer small business owners expect better business conditions in the coming months and that there has been a drop in those viewing it as a good time to expand. Inflation continues to be a significant issue, second only to labor quality.

In South Dakota, NFIB State Director Jason Glodt observed that while the small business sector's health remains stable, the rising uncertainty index indicates caution among business owners about future conditions. "Rising costs, regulations, and workforce shortages are hurting Main Street businesses," Glodt said. He emphasized the need for lawmakers to focus on reforms and tax cuts to support small businesses.

The report highlighted several key findings:

- The net percentage of owners expecting economic improvement fell by ten points from January to a net 37%.

- Twelve percent reported it was a good time to expand their business, marking the largest monthly decrease since April 2020.

- Sixteen percent identified inflation as their primary operational challenge, down two points from January.

- A net 32% of owners raised average selling prices, marking a significant increase since April 2021.

- Labor costs were cited as the most critical problem by 12% of business owners.

The survey also introduced a new question regarding overall business health evaluation:

- Eleven percent rated their business health as excellent.

- Fifty-five percent considered it good.

- Twenty-seven percent viewed it as okay.

- Six percent reported it as bad.

Regarding employment challenges:

- Thirty-eight percent reported unfilled job openings in February.

- A net 15% plan to create new jobs in the next three months.

On capital outlays:

- Fifty-eight percent made expenditures in recent months.

- Nineteen percent plan further capital outlays soon.

Sales trends showed:

- A net negative 12% reported higher nominal sales recently.

Finally, financial aspects revealed:

- A net negative five percent viewed current inventory stocks as too low.

This data was collected by NFIB's Research Center through surveys conducted with randomly selected members each month since February 2025.