Small Business Optimism Wanes in March


  • The NFIB Small Business Optimism Index declined to 93.2 in March from 95.7 the month prior.
  • The index has now dipped below its long-term average of 98 for three straight months. March’s index reading is on par with the average registered between 2010-2015 in the aftermath of the 2008-2009 economic downturn.
  • The drop in small business confidence has occurred against a backdrop of ongoing supply chain disruptions, labor shortages and Russia’s invasion of Ukraine, which threatens to intensify existing inflationary pressures.
  • The Fed moving forward with tightening monetary policy and financial market volatility has also likely weighed on confidence.
  • Business owners continue to see inflation as a major challenge, with 31% of firms reporting inflation as the single most important problem, the highest since 1981.
  • Small businesses increasingly feel pessimistic about the economic outlook and future business conditions. The net percent of firms expecting the economy to improve dropped to -49.0%, the lowest on record dating back to 1973.