NFIB’s Small Business Optimism Index Increased 0.8 Points in March; Still Below 49-Year Average

The National Federation of Independent Business (NFIB), one of the largest small business associations in the US, reported on Tuesday (4-11-23) its Small Business Optimism Index (SBOI) for March. According to the report, the March SBOI increased 0.8 points to a reading of 90.1. This marks the fifteenth consecutive month that the SBOI has been below the 49-year average reading of 98. The last time the Index was at or above the average was December 2021.

Owners expecting better business conditions over the next six months was unchanged from February at a net negative 47%, although 14 percentage points better than June 2022 when the reading was a negative 61%.

Other highlights of the SBOI include the following:

• Twenty-four percent of business owners reported inflation as their single most important business problem. However, this is down 4% from last month.
• Forty-three percent of business owners reported job openings that were hard to fill. This is down 4% from last month but still remains historically high.
• The net percentage of owners raising average selling prices decreased one point to a net 37%, seasonally adjusted.
• The net percentage of owners who expect real sales to be higher dropped six points from February to a net negative 15%.

Adding additional background and his analysis to the March SBOI, NFIB Chief Economist Bill Dunkelberg said:

“Small business owners are cynical about future economic conditions. Hiring plans fell to their lower level since May 2020, but strong consumer spending has kept Main Street alive and supported strong labor demand.”