Small business confidence has taken a sharp hit, with uncertainty reaching near-record levels, according to the National Federation of Independent Business (NFIB). The organization’s Small Business Optimism Index fell 2.1 points in February to 100.7, marking a significant shift from the enthusiasm seen just months earlier.
The NFIB’s uncertainty index climbed four points to 104, its second-highest level ever recorded since the survey began in 1986. In November and December, optimism surged to a six-year high following the election of President Donald Trump and a Republican-led Congress. However, that optimism has primarily faded, with small business owners expressing growing concerns about economic conditions.
The percentage of small business owners expecting the economy to improve dropped by 10 points to 37%, reflecting a more cautious outlook. Additionally, the number of owners who believe now is a good time to expand their business saw its steepest decline in five years.
Meanwhile, small businesses are raising prices at an accelerating pace. The NFIB reported a 10-percentage-point increase in the number of business owners raising average selling prices—the biggest jump since April 2021 and the third-highest on record.
The survey results align with broader economic caution amid ongoing tariff policies from the Trump administration. Investor concerns were also evident, with the S&P 500 dropping 2.7% on Monday, extending its decline to 9% from its mid-February peak.
As uncertainty rises, small businesses continue to navigate evolving economic conditions, balancing pricing strategies and expansion plans against an increasingly complex landscape.
