The National Federation of Independent Business (NFIB) released its latest Small Business Optimism Index, which showed a slight decrease of 0.2 points in January to 99.3. Despite this dip, the index remains above its 52-year average of 98.
Thor Stacey, Alaska state director for NFIB, commented on the results: “I am glad to see that, despite a slight dip last month, the Index continuing above its 52-year average. Because the Index is not broken down by state, we don’t know if small business owners here are as enthused as their counterparts in other parts of the nation, but the Legislature’s recent announcement that Gov. Mike Dunleavy’s economic plan is dead on arrival doesn’t signal there is much optimism ahead.”
Out of ten components that make up the Optimism Index, three increased while seven declined. The most notable change was an increase in expected real sales volume by six points. The Uncertainty Index rose seven points from December to 91, largely due to more owners expressing doubt about whether it is a good time to expand their businesses.
A key feature of this report was the introduction of the NFIB Small Business Employment Index. This new metric compiles several jobs-related questions into one figure and currently stands at 101.6—about 1.5 points above its historical average—indicating a balanced labor market.
NFIB Chief Economist Bill Dunkelberg said: “While GDP is rising, small businesses are still waiting for noticeable economic growth. Despite this, more owners are reporting better business health and anticipating higher sales.”
Additional highlights from January include:
– Thirteen percent of respondents identified insurance cost or availability as their main problem—an increase of four points from December and matching levels last seen in December 2018.
– Sixty percent reported capital outlays over the past six months—the highest since November 2023.
– A net negative six percent reported paying higher interest rates on their most recent loan—a drop from December—which suggests improved credit conditions for small borrowers.
– Reports on overall business health improved compared with December; fourteen percent rated their business health as excellent (up five points), fifty-four percent as good (unchanged), twenty-seven percent as fair (down seven points), and four percent as poor (up one point).
NFIB serves as an advocacy group for small businesses both nationally and across all fifty states including Alaska [source]. It provides legislative updates, advocacy alerts and resources tailored specifically for small business needs [source]. Through these efforts [source], NFIB seeks to empower business owners to shape policy decisions and promote economic growth within communities [source].
