The NFIB Small Business Optimism Index dropped by 0.2 points in January to 99.3, according to the latest report from the National Federation of Independent Business (NFIB). Despite this decrease, the index remains above its 52-year average of 98.
Of the ten components that make up the Optimism Index, three showed improvement while seven declined. The most notable change was a six-point increase in owners’ expectations for real sales volume over the next quarter. The Uncertainty Index rose by seven points from December, reaching 91, primarily due to more business owners expressing uncertainty about whether it is a good time to expand their operations.
“While GDP is rising, small businesses are still waiting for noticeable economic growth,” said NFIB Chief Economist Bill Dunkelberg. “Despite this, more owners are reporting better business health and anticipating higher sales.”
NFIB State Director Jason Espinoza commented on conditions in New Mexico: “The optimism index remains stable, but small business owners remain cautious about the future. New Mexico small business owners must contend with an unbalanced legal system and complex regulatory state – both of which exacerbate their uncertainty. That’s why this session, NFIB is focused on reforms that increase accountability in the courtroom, the Roundhouse, and in rulemaking agencies.”
The report introduced the new NFIB Small Business Employment Index, which consolidates various jobs-related questions into a single measure. This index currently stands at 101.6—about 1.5 points above its historical average—indicating a balanced labor market.
Additional findings from January include:
- Thirteen percent of respondents identified insurance costs or availability as their top problem, an increase not seen since December 2018.
- Sixty percent reported capital outlays over the past six months—the highest level since November 2023.
- Fewer owners paid higher interest rates on recent loans compared to December.
- Labor quality as a primary concern continued to decline for a third consecutive month.
- More owners expect higher real sales volumes in the next quarter.
- Inventory gains reached their highest point since January 2023.
- Supply chain disruptions affected fewer businesses than in December.
- Reports of raising selling prices fell but remained well above historical averages; inflationary pressures persist.
Regarding employment trends, a seasonally adjusted 31% reported job openings they could not fill—a figure still above historical averages—with many citing few or no qualified applicants available.
Capital expenditures saw an uptick: among those investing in their businesses recently, most spent on equipment or vehicles while fewer planned such spending over the coming half-year.
Profit trends were mixed; weaker sales and material costs weighed down some firms’ profits while others benefited from increased sales volume and higher prices.
Taxation remained the top concern for small business owners at 18%, followed by issues related to labor quality (16%), insurance (13%), inflation (12%), government regulations (9%), poor sales (9%), competition from larger firms (6%), and financing or interest rates (3%).
The survey was conducted among randomly selected members of NFIB during January 2026 and forms part of ongoing research into small business economic trends dating back several decades.
