Enchantment State News

The NFIB Small Business Optimism Index saw a decline of 2.3 points in January, reaching 102.8. Despite this drop, the index remains above the 51-year average of 98 for the third consecutive month. Meanwhile, the Uncertainty Index increased by 14 points to 100, marking its third-highest recorded level after two months of decline.

"Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise," stated NFIB Chief Economist Bill Dunkelberg. He noted ongoing hiring challenges as a significant issue for Main Street owners who are struggling to find qualified workers. Additionally, fewer businesses plan capital investments as they brace for the coming months.

NFIB State Director Jason Espinoza highlighted concerns specific to New Mexico, urging state lawmakers to oppose proposals that could increase business costs. "While New Mexico’s small business owners are hopeful future business conditions will improve, rising costs and hiring challenges are fueling uncertainty," Espinoza said. He pointed out legislative proposals such as a broad paid family medical leave mandate as potential cost drivers while also noting efforts towards greater transparency in civil justice and health insurance systems.

Key findings from the survey include a decrease in the net percentage of owners expecting economic improvement by five points from December to a net 47% (seasonally adjusted). Inflation was cited as the most critical problem by 18% of owners, matching labor quality concerns and reflecting a decrease from previous months.

The survey also found that job openings remained unfilled for 35% of all small business owners in January, consistent with December figures. Of those hiring or attempting to hire in January, 90% reported few or no qualified applicants.

Regarding compensation trends, a seasonally adjusted net 33% reported raising compensation levels, an increase from December's figures. Plans to raise compensation in the next three months dropped slightly.

In terms of capital outlays over the past six months, 58% of owners reported expenditures on various items including new equipment and vehicles. However, plans for future capital outlays decreased significantly from December.

Sales trends showed mixed results with a net negative report on nominal sales over the past three months and lower expectations for real sales volumes moving forward.

The NFIB Research Center has been collecting data on small business economic trends since 1973 through quarterly surveys and since 1986 through monthly surveys. The latest survey was conducted in January 2025 and released on February 11th.