The NFIB Small Business Optimism Index decreased by 3.3 points to 97.4 in March 2025, reaching its lowest level since October 2024 and falling short of the market’s expectation of 101.3.
US small business sentiment weaker than expected
This marks the largest drop since June 2022. At the same time, the Uncertainty Index declined to 96, down eight points from the second-highest reading in February. Small business owners have scaled back their sales growth projections, with a drop of 11 points to a net 3%, as they gain a clearer perspective on how new policy priorities are impacting their operations. Additionally, the percentage of owners expecting improved business conditions fell by 16 points to a net 21%, reflecting the third consecutive monthly decline and the biggest drop since December 2020.
Other declines
Other declines included: earnings trends (-4 points to a net -28%); plans to hire more employees (-3 points to 12%); the view that now is a good time to expand (-3 points to 9%); current inventory (-2 points to -7%); and expected credit conditions (-1 point to -4%).
