DES MOINES, Iowa — Optimism among U.S. small business owners saw a slight decline in February, but reports of higher sales and improved labor quality offered positive signs, according to the latest survey from the National Federation of Independent Business (NFIB).
The NFIB Small Business Optimism Index fell 0.5 points to 98.8, remaining just above its 52-year average of 98. However, the Uncertainty Index decreased three points to 88, suggesting small business owners feel more certain about the coming months.
“High sales and increased profits made February a more positive month for many owners,” said NFIB Chief Economist Bill Dunkelberg. “But competition from large businesses is putting stress on Main Street firms as they navigate the current economic climate.”
In Iowa, the decrease in the national Uncertainty Index was viewed as a positive.
“The national Uncertainty Index fell three points in February, which is a positive sign for Iowa’s small businesses,” said NFIB Iowa State Director Logan Shine. “If we want this trend to continue, the Legislature should prioritize property tax reform and cutting red tape, so Main Street has what it needs to grow and remain competitive.”
Key findings from the February report include:
- Sales Rebound: A net 1% of all owners reported higher nominal sales in the past three months, a seven-point increase from January and close to the historical average. This is the highest sales gain since May 2022. However, the net percent expecting higher real sales volumes dropped eight points to 8%.
- Labor Market Tight: The Employment Index ticked up nearly a point to 103.5. Only 15% of owners cited labor quality as their single most important problem, down one point from January and the fourth consecutive monthly decline—the lowest reading since April 2020.
- Compensation Rises: A net 34% of owners reported raising compensation, up two points from January and the highest level since March 2025.
- Profits Improve: The frequency of reports of positive profit trends rose seven points from January to a net negative 14%, the highest reading since December 2021.
- Price Increases Slow: The net percent of owners raising average selling prices fell two points to a net 24%, marking the third straight month of slowing actual price increases. However, both actual and planned price hikes remain above historical averages.
- Competition Rises: Eight percent of owners reported competition from large businesses as their single most important problem, up two points from January and the highest level since May 2021.
- Supply Chains Ease: Fifty-nine percent of owners reported that supply chain disruptions affected their business, a three-point decrease from January.
Taxes remained the top concern, cited by 19% of small business owners, up one point. Inflation was the third top issue, unchanged at 12%.
