Small Business Optimism Declined 3 Points to 95.8 in March

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Small Business Optimism Declined 3 Points to 95.8 in March

Washington, DC, April 14, 2026-The NFIB Small Business Optimism Index fell 3.0 points in March to 95.8, leaving it below its 52-year average of 98.0. 

The last time the Optimism Index fell below its historical average was April 2025. The Uncertainty Index rose four points from February to 92, well above its historical average of 68.

“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,” said NFIB chief economist Bill Dunkelberg. “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.”

Key findings:

  • The frequency of reports of positive profit trends fell 11 points from February to a net negative 25% (seasonally adjusted), contributing the most to the Optimism Index’s decline.
  • The net percent of owners expecting better business conditions fell seven points from February to a net 11% (seasonally adjusted), the third consecutive monthly decline and the lowest level since October 2024. This was the second biggest contributor to the Index’s decline.
  • The Employment Index fell in March from 103.5 to 101.6. While the 1.9-point decline is a meaningful turn in labor market conditions, the current reading remains above both the 2025 average of 101.2 and the historical average of 100.
  • In March, both planned and actual labor compensation decreased from the previous month. A seasonally adjusted net 33% reported raising compensation, down one point from February. A seasonally adjusted net 18% plan to raise compensation in the next three months, down four points from February and the lowest reading since July 2025.
  • Sixteen percent (seasonally adjusted) of small business owners plan to make capital outlays in the next six months, down two points from February and the lowest level since November 2009.
  • A seasonally adjusted net negative 5% of all owners reported higher nominal sales in the past three months, down six points from February. This decline ended a string of four consecutive months of improvement.
  • A net negative 5% (seasonally adjusted) of owners plan inventory investment in the coming months, down three points from February and the lowest level since May 2024. This is in step with the decline in those expecting higher sales over the next quarter.
  • In March, 62% of small business owners reported that supply chain disruptions affected their business to some extent, up three points from February. Three percent reported a significant impact (down two points), 17% reported a moderate impact (up three points), 42% reported a mild impact (up two points), and 36% reported no impact (down two points).
  • Actual price increases picked up in March following three consecutive months of decline. The net percent of owners raising average selling prices rose one point from February to a net 25% (seasonally adjusted), well above its historical average.
  • In contrast to actual prices, planned prices declined in March, falling four points to a net 24% (seasonally adjusted). This was the lowest level since July 2024.
  • When asked to evaluate the overall health of their business, 13% rated it as excellent (up one point), 51% as good (down four points), 30% as fair (up four points), and 4% as poor (down one point).