The National Federation of Independent Business (NFIB) reported on Apr. 16 that its Small Business Optimism Index fell by 3.0 points in March to 95.8, remaining below the historical average of 98.0. The Uncertainty Index also rose to 92, which is significantly above its typical level.
This development is important because the index reflects how small business owners feel about the economy and their prospects, which can influence hiring, investment, and growth across Illinois and beyond.
Bill Dunkelberg, NFIB Chief Economist, said, “The 20% Small Business Deduction and other supportive small business tax provisions in the Working Families Tax Cut Act have had many positives for small business owners. However, the dramatic spike in oil prices has spooked consumers and owners alike. Small business owners are having to absorb those higher input costs and pass them along to their customers.”
Noah Finley, NFIB Illinois State Director, said that “Small businesses owners are navigating economic and regulatory uncertainty, dampening their overall confidence.” He added that “Illinois legislators must tamp down on proposals, such as the draconian workplace temperature bill, that would impose new costs and legal liabilities on Main Street businesses.”
Key findings from March show a decline in profit trends among small businesses with a net negative report of positive profits falling by 11 points from February. Expectations for better business conditions dropped as well for a third consecutive month while planned capital outlays reached their lowest point since November 2009. Supply chain disruptions affected over sixty percent of respondents at varying levels.
The NFIB Small Business Employment Index also decreased by nearly two points to 101.6 in March—still above last year’s average but signaling moderation in labor market conditions according to data discussed on an episode of NFIB Research Center’s “Small Business by the Numbers” podcast.
Other survey results indicated continued challenges: fewer job openings could be filled compared with previous months; both planned and actual compensation levels declined but remained above historical averages; sales volumes weakened after several months of improvement; more than half reported capital expenditures but at lower rates than earlier this year; taxes remain cited as the most significant problem followed by labor quality concerns.
The National Federation of Independent Business bolsters community well-being by promoting the role of small businesses in Illinois according to the official website. The organization includes more than 10,000 members statewide according to its official website, engages with state lawmakers according to its official website, extends efforts throughout Illinois according to its official website, offers advocacy programming according to its official website, and drives economic growth through legislative advocacy according to its official website.
Looking ahead, only eleven percent believe it is a good time for expansion—a decline not seen for six months—and inflation has become an increasing concern among respondents.
