Grand Canyon Times

The NFIB Small Business Optimism Index saw a decline of 2.3 points in January, settling at 102.8. This marks the third consecutive month the index remains above the 51-year average of 98. Meanwhile, the Uncertainty Index rose by 14 points to reach 100, representing its third-highest recorded reading after two months of decline.

"Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise," stated NFIB Chief Economist Bill Dunkelberg. He also noted that "hiring challenges continue to frustrate Main Street owners as they struggle to find qualified workers to fill their many open positions." Furthermore, he observed that fewer business owners are planning capital investments as they prepare for the upcoming months.

While specific data for individual states was not available, NFIB State Director Chad Heinrich urged state lawmakers to focus on supporting small businesses. "Arizona’s small business owners are hopeful future business conditions will improve, but rising costs and hiring challenges are fueling uncertainty," Heinrich commented. He suggested that state legislators could assist by rejecting new industry mandates that increase costs and maintaining a balanced approach to government spending.

Key findings from the survey include a five-point drop in the net percentage of owners expecting economic improvement since December, landing at a net 47% when seasonally adjusted. Inflation and labor quality were cited equally as the most pressing issues by 18% of respondents. The percentage of owners planning price hikes decreased slightly from December figures.

Additionally, job openings remained difficult to fill for 35% of small business owners surveyed in January, unchanged from December's numbers. Among those hiring or attempting to hire during this period, 90% reported difficulty finding qualified candidates.

A notable shift was observed in capital expenditure plans; only 20% plan such outlays over the next six months—a seven-point decrease from December figures—marking this component as having a significant impact on this month's index decline.

Regarding sales trends, there was a one-point drop in reports of higher nominal sales over the past three months compared to December figures. Inventory gains also fell by six points to a net negative figure when seasonally adjusted.

In terms of financing concerns, three percent reported unmet borrowing needs while twenty-five percent had all credit needs satisfied. A net three percent found their last loan more challenging to secure than previous attempts—a metric not seen since June 2022.

The NFIB Research Center has been collecting Small Business Economic Trends data through quarterly surveys since late 1973 and monthly surveys since 1986. The report is released monthly on the second Tuesday following data collection conducted in January 2025.