Grand Canyon Times

The NFIB Small Business Optimism Index experienced a notable increase in December, climbing by 3.4 points to reach 105.1. This marks the second consecutive month that the index has surpassed its 51-year average of 98, achieving its highest level since October 2018. Out of the ten components that make up the Optimism Index, seven saw increases, two decreased, and one remained unchanged. The Uncertainty Index showed a decline of 12 points in December, settling at 86.

NFIB Chief Economist Bill Dunkelberg commented on the situation, stating, "Optimism on Main Street continues to grow with the improved economic outlook following the election." He added that small business owners are feeling more certain about the economic agenda of the new administration and have heightened expectations for economic growth and positive business conditions.

Chad Heinrich, NFIB State Director, highlighted the importance of legislative support for small businesses. He urged lawmakers to seize this opportunity to implement reforms that could boost Arizona's economy by advocating for a fairer tax system and minimizing government interference.

The survey revealed several key findings:

- The net percentage of owners expecting economic improvement rose by 16 points from November to a net 52%, reaching its highest level since late 1983.

- The proportion of small business owners who believe it is a good time to expand increased by six points to 20%, marking its highest reading since February 2020.

- A net 6% of owners plan inventory investments in upcoming months, which is up five points from November and represents the highest reading since December 2021.

The monthly jobs report indicated that a seasonally adjusted 35% of small business owners reported job openings they could not fill in December, slightly down from November. Among those hiring or attempting to hire, a significant majority (89%) reported difficulties finding qualified applicants.

Regarding capital expenditures over the past six months, 56% of owners reported making such outlays—an increase from November—with investments in equipment and vehicles being most common.

The report also noted challenges related to inflation and labor quality as persistent issues for business operations. Inflation was identified as the single most important problem by 20% of owners. Labor quality was cited as a major issue by another significant portion of respondents.

Finally, while financing remains relatively accessible for most businesses surveyed—only two percent reported unsatisfied borrowing needs—a slight uptick was noted in reports indicating loans were harder to obtain compared to previous attempts.

The NFIB Research Center has been collecting data on Small Business Economic Trends through quarterly surveys since late 1973 and monthly surveys since 1986. This particular survey was conducted in December 2024.