The National Federation of Independent Business (NFIB) Small Business Optimism Index fell 3.0 points in March to 95.8, leaving it below its 52-year average of 98.0. The April 14 report marks the first time the index has dipped below that long-run benchmark since April 2025.
Of the 10 Optimism Index components, eight declined and two remained unchanged. The biggest drag came from profits. The seasonally-adjusted frequency of reports of positive profit trends fell by 11 points from February to negative 25 per cent, contributing the most to the optimism index’s decline.
Expectations for the future also weakened. The seasonally-adjusted percentage of owners expecting better business conditions fell by 7 points from February to 11 per cent, the third consecutive monthly decline and the lowest level since October 2024.
Meanwhile, the NFIB Uncertainty Index rose 4 points from February to 92, well above its historical average of 68. That signals business owners feel unusually unsure about what lies ahead, which often leads to pulled-back spending and hiring.
Planned capital spending reflected that caution. Sixteen percent (seasonally adjusted) of small business owners plan to make capital outlays in the next six months, down 2 points from February and the lowest level since November 2009. That 15-year low suggests owners are shelving equipment purchases and expansion plans.
NFIB Chief Economist Bill Dunkelberg pointed to energy as a key culprit. “The dramatic spike in oil prices has spooked consumers and owners alike. Small business owners are having to absorb those higher input costs and pass them along to their customers.”
For business owners, this data is a practical reminder to stress-test cash flow projections, especially if your costs are tied to fuel, shipping, or other energy-sensitive inputs. Taxes are once again the top issue for small business owners, with 19% of businesses reporting taxes as their single most important problem, followed by labor quality and concerns about inflation.
The full NFIB report and the NFIB’s analysis are both available on NFIB.com. The next monthly Optimism Index, covering April survey data, is expected in mid-May.
