The Sconi

The National Federation of Independent Business (NFIB) has released its Small Business Optimism Index for January, showing a decline of 2.3 points to 102.8. Despite this drop, the index remains above the 51-year average of 98 for the third consecutive month. However, the Uncertainty Index rose by 14 points to 100, marking the third highest reading recorded 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 that hiring challenges persist as businesses struggle to find qualified workers and fewer are planning capital investments.

Bill G. Smith, NFIB Wisconsin State Director, highlighted specific challenges in Wisconsin's manufacturing and agriculture sectors: "90% of small businesses trying to hire report few or no qualified applicants." He urged lawmakers to prioritize workforce development policies.

Key findings from the report include a five-point drop in the net percentage of owners expecting economic improvement and an unchanged 35% reporting unfilled job openings. Inflation was reported as a major issue by 18% of owners, tying with labor quality as a top concern.

Additionally, there was a decrease in planned price hikes and capital outlays among business owners. The net percentage planning inventory investment also fell significantly from December's high since December 2021.

The survey indicated mixed trends in compensation and profit reports among small business owners. While some raised compensation levels, others cited weaker sales and rising material costs as factors affecting profits.

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