Sooner State News

The NFIB Small Business Optimism Index saw a notable increase in December, rising by 3.4 points to reach 105.1. This marks the second consecutive month that the index has been above its 51-year average of 98 and represents the highest reading since October 2018. Of the ten components of the Optimism Index, seven showed increases, two decreased, and one remained unchanged. The Uncertainty Index experienced a significant drop of 12 points to 86.

NFIB Chief Economist Bill Dunkelberg commented on this trend, 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 hopeful about the economic policies anticipated from the new administration.

Jerrod Shouse, NFIB State Director, emphasized the importance of pro-small business reforms at the state level. He noted that lawmakers have an opportunity to support this optimism through measures such as cutting taxes and reducing regulatory burdens.

Key findings from the survey indicate a positive outlook among small business owners:

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

- Those who believe it is a good time to expand their business increased by six points to 20%.

- Expectations for higher real sales volumes grew by eight points to a net 22%.

- A net 6% of owners plan inventory investment in upcoming months.

However, some challenges persist:

- A seasonally adjusted net negative 13% reported higher nominal sales over three months.

- Inflation remains a concern for many; it was cited as the most important problem by 20% of owners.

- Labor quality issues continue, with labor costs remaining steady as another key concern.

In terms of employment trends, December saw a slight decrease in job openings that could not be filled. Fifty-five percent of owners were hiring or trying to hire during this period but faced difficulties finding qualified applicants.

Investment activity showed an upward trend: fifty-six percent reported capital outlays over six months. Plans for future capital investments saw a minor decline from November’s high levels.

Profitability reports indicated mixed results: while some blamed weaker sales and rising material costs for lower profits, others credited increased sales volumes for profit gains.

Overall borrowing needs appear largely satisfied among respondents; only four percent identified financing as their top business problem in December.

The NFIB Research Center has been collecting data on small business economic trends since 1973 through quarterly surveys and monthly surveys since 1986. This particular survey was conducted in December 2024 and released on January's second Tuesday.