Small business owners in the United States reported a slight improvement in their outlook at the end of 2025, according to the latest National Federation of Independent Business (NFIB) Small Business Optimism Index. The index rose by 0.5 points in December to reach 99.5, staying above its long-term average of 98. The increase was mainly driven by more owners expecting better business conditions.
The Uncertainty Index dropped seven points from November to 84, marking its lowest level since June 2024.
Casey Hill, state director for NFIB in Utah, commented on the findings: “I’m glad see the final Small Business Optimism Index of 2025 ending on a somewhat positive note. Not mentioned in the Index, but, I believe, not too far back in the minds of Main Street business owners, was the relief they’re still feeling about the 20% Small Business Deduction being made permanent instead of being allowed to expire at the end of last month. Utah has done well in complementing federal pro-small-business initiatives with its own accomplishments. For its 2026 session, energy costs will no doubt be a front-burner issue, as legislators search for the answer to the question why a Utahan can drive to another state and pay 60-cents less for a gallon of gas.”
Bill Dunkelberg, NFIB Chief Economist, said: “2025 ended with a further increase in small business optimism. While Main Street business owners remain concerned about taxes, they anticipate favorable economic conditions in 2026 due to waning cost pressures, easing labor challenges, and an increase in capital investments.”
The December report highlighted that the net percentage of owners expecting better business conditions increased by nine points from November to a seasonally adjusted net 24%. This marked the first rise since July and contributed most significantly to overall optimism.
When asked about their businesses’ health:
- Nine percent rated it excellent (down two points),
- Fifty-four percent rated it good (up one point),
- Thirty-four percent rated it fair (up four points),
- Three percent rated it poor (down two points).
Taxes emerged as a top concern among small business owners; twenty percent identified taxes as their single most important problem—an increase of six points from November and the highest reading since May 2021.
In addition to releasing this data, NFIB introduced a new episode of its podcast “Small Business by the Numbers.” Hosted by Holly Wade and Peter Hansen from NFIB’s Research Center, the podcast discusses economic trends and stories affecting small businesses across the country.
The monthly Small Business Optimism Index is widely used by policymakers such as those at the Federal Reserve and Congress as an indicator for America’s small business economy. The index provides national-level insights into sentiment among NFIB-member businesses spanning various industries and sizes.
NFIB has represented small and independent businesses nationwide for over eight decades through advocacy efforts at both federal and state levels.
