NFIB Small Business Optimism Index Falls in March

On Tuesday, the National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index (SBOI) fell 3.0 points to 95.8 in March. This was 2.2 points below the 52-year average of 98. The last time the Optimism Index fell below its historical average was April 2025.

The NFIB Uncertainty Index rose 4 points to 92, remaining well above its historical average of 68.

Other highlights from the March SBOI include:

• Overall business health: 13% of owners rated their business health as excellent (+1 point from prior month); 51% rated it good (-4 points); 30% rated it fair (+4 points); and 4% rated it poor (-1 point).
• Sales expectations: The net percent of owners expecting better business conditions fell 7 points to a seasonally adjusted net 11%, marking the third consecutive monthly decline and the lowest level since October 2024.
• Profits: Reports of positive profit trends fell 11 points to a net -25%, the largest contributor to the index’s decline.
• Employment: The Employment Index fell 1.9 points to 101.6, remaining above both the 2025 average of 101.2 and the historical average of 100.
• Compensation: A seasonally adjusted net 33% of owners reported raising compensation, down 1 point from February. A net 18% plan to raise compensation in the next three months, down 4 points and the lowest reading since July 2025.
• Capital spending: 16% of owners plan to make capital outlays in the next six months, down 2 points from February and the lowest level since November 2009.
• Supply chain impacts: 62% of owners reported disruptions affecting their business to some extent, up 3 points from February.