The National Federation of Independent Business reported on May 13 that its Small Business Optimism Index rose slightly by 0.1 points in April to reach 95.9, remaining below the long-term average of 98.0 for a second consecutive month. The Uncertainty Index dropped by four points to 88 but continues to be well above its historical norm.
This development is significant as it highlights ongoing challenges for small businesses, particularly related to inflation and uncertainty about government policy. These factors are influencing investment decisions and overall confidence among business owners.
“Inflationary pressures continue to be a challenge for Main Street,” said NFIB Chief Economist Bill Dunkelberg. “While small business optimism is currently fragile, the benefits of the Working Families Tax Cut Act should start to feed into the private sector over the next few months.”
Chad Heinrich, NFIB State Director, said that Arizona’s small businesses are experiencing similar conditions as those seen nationally. “Small business owners continue to feel pressure on prices and are uncertain about government policy,” he said. “Our job creators are holding back on investments in their business until there’s clarity on tax conformity. Lawmakers can deliver the certainty Arizona’s small businesses need by fully conforming with the expensing provisions in current federal law.”
Key findings from April include a decline in employment indicators and continued reports of labor quality as a top concern among owners. The Employment Index fell from 101.6 to 100.4, dipping below last year’s average but staying just above historical norms. Reports of actual and planned price increases rose, with a net percent of owners raising selling prices reaching well above historic averages.
A seasonally adjusted net negative eight percent of all owners reported higher nominal sales over the past three months—a drop from March—while expectations for future real sales volumes also declined sharply, hitting their lowest level in twelve months.
The survey found that hiring remains challenging: thirty-four percent of owners had job openings they could not fill; twenty-nine percent sought skilled workers; thirteen percent needed unskilled laborers; and forty-six percent reported few or no qualified applicants for open positions.
Outside labor issues, taxes were cited as the most important problem by seventeen percent of respondents while sixteen percent named inflation—a figure that has increased since March—as their primary concern.
The National Federation of Independent Business empowers Arizona’s small business community through advocacy efforts aimed at shaping economic policies and providing resources such as compliance tools and research surveys according to the official website.
Looking ahead, only seven percent considered it a good time to expand their businesses—the lowest reading since October 2024—and expectations for better conditions have declined steadily over recent months.
