Enchantment State News

The NFIB Small Business Optimism Index increased by 3.4 points in December, reaching 105.1, marking the highest level since October 2018. This is the second consecutive month that the index has surpassed the 51-year average of 98. Seven out of ten components of the index showed improvement, while two decreased and one remained unchanged. The Uncertainty Index dropped by 12 points to 86.

"Optimism on Main Street continues to grow with the improved economic outlook following the election," stated NFIB Chief Economist Bill Dunkelberg. He noted that small business owners are more hopeful about the economic policies of the new administration, anticipating growth, lower inflation, and favorable business conditions.

Although specific state data is not available, NFIB State Director Jason Espinoza encouraged lawmakers to focus on reforms that benefit small businesses and stimulate economic growth. "As lawmakers prepare for the upcoming legislative session, they have an incredible opportunity to capitalize on the rising optimism among small business owners," he said.

Key findings from the survey include a significant rise in expectations for economic improvement among business owners, which jumped by 16 points to a net 52%, seasonally adjusted—the highest since late 1983. The percentage of owners who believe it is a good time to expand their business rose six points to 20%, while those expecting higher real sales volumes increased eight points to a net 22%.

A net six percent of owners plan inventory investment in upcoming months, marking an increase from November and reaching its highest level since December 2021. However, reports of raising compensation decreased slightly from November's figures.

Twenty percent of respondents identified inflation as their primary concern due to rising input and labor costs. This issue slightly edged out labor quality as the top problem faced by businesses.

In terms of employment challenges, a seasonally adjusted 35% reported job openings they could not fill in December—a slight decrease from November—while many cited difficulties finding qualified applicants.

Fifty-six percent of business owners made capital outlays over the past six months with investments primarily in equipment and vehicles. Looking ahead, planned capital expenditures for the next six months saw a minor decline from previous levels.

Sales trends were mixed; while nominal sales figures remained stable compared to November, expectations for higher real sales volumes reached their peak since January 2020.

Overall borrowing needs appeared largely satisfied among respondents; however, four percent reported greater difficulty obtaining loans than before.

The NFIB Research Center has been gathering data on small business economic trends through quarterly surveys since late 1973 and monthly surveys since 1986. The latest survey was conducted in December 2024 and released on January's second Tuesday.