The National Federation of Independent Business (NFIB) reported on Mar. 11 that its Small Business Optimism Index fell by 0.5 points in February to 98.8, though it remained slightly above the long-term average. The Uncertainty Index also decreased by three points from January, reaching a level of 88.
The report is significant as it provides insight into the economic outlook and challenges faced by small businesses in Illinois and across the country. These findings can influence policy discussions and help business owners prepare for future developments.
Bill Dunkelberg, NFIB Chief Economist, said, “Although optimism declined slightly, small businesses report feeling more certain in February as they look toward the coming months.” He added, “High sales and increased profits made February a more positive month for many owners, but competition from large businesses is putting stress on Main Street firms as they navigate the current economic climate.”
Noah Finley, NFIB Illinois State Director, said that local business owners are closely monitoring legislative activity: “Small business owners are watching to see what policies emerge out of Springfield this spring. New taxes, mandates, or minimum wage hikes would negatively impact Main Street businesses and raise costs for Illinois consumers.”
Key findings from the February survey include an increase in the Employment Index to 103.5—above both its historical and recent averages—driven mainly by compensation-related factors rather than increases in employee numbers. Labor quality concerns continued to decline for a fourth consecutive month, with only 15% citing it as their top issue—the lowest since April 2020. Sales performance improved with a net 1% reporting higher nominal sales over the past three months; however, expectations for future sales volumes dropped sharply.
Other data showed that supply chain disruptions affected fewer businesses compared to January and that price increases slowed for a third straight month but remained above historical norms. Reports of positive profit trends rose significantly compared to January levels.
The NFIB Research Center has been collecting Small Business Economic Trends data through quarterly surveys since late 1973 and monthly surveys since 1986. The latest survey was conducted in February among randomly selected NFIB members.
Looking ahead, small business owners remain cautious about new policies that could affect their operations while continuing to adapt to changing market conditions.
