Cornhusker State News

The NFIB Small Business Optimism Index saw a notable increase in December, rising by 3.4 points to reach 105.1. This marks the second consecutive month that the index has surpassed the 51-year average of 98 and represents the highest reading since October 2018. Of the ten components measured within the index, seven showed improvement, two declined, and one remained unchanged. The Uncertainty Index also experienced a decrease of 12 points, settling at 86.

"Optimism on Main Street continues to grow with the improved economic outlook following the election," stated NFIB Chief Economist Bill Dunkelberg. He added that small business owners are feeling more confident about the economic policies expected from the new administration, anticipating growth, lower inflation, and favorable business conditions.

Ryan McIntosh, NFIB Nebraska State Director, commented on local trends: "Nebraska’s small business owners are growing more optimistic about 2025. The report’s finding that 56% of businesses made capital investments in the last six months reflects what we’re seeing locally, especially in our agricultural technology and manufacturing sectors." McIntosh urged Nebraska lawmakers to capitalize on this optimism by prioritizing policies that support small businesses.

Key findings from the report include a significant rise in expectations for economic improvement among small business owners. The net percentage expecting better economic conditions increased by 16 points to a net 52%, which is the highest level since late 1983. Additionally, those considering it a good time to expand their operations rose by six points to 20%, marking its peak since February 2020.

In terms of sales expectations, there was an eight-point increase in those predicting higher real sales volumes, reaching a net 22%. Plans for inventory investment also grew by five points to a net 6%, indicating heightened activity not seen since December 2021.

Despite these positive indicators, challenges remain for small businesses. Inflation continues to be cited as a major concern by 20% of owners due to rising input and labor costs. Furthermore, labor quality remains an issue for many businesses trying to fill job openings.

Capital expenditures have been robust over recent months with over half of surveyed owners reporting outlays on equipment and facilities improvements. However, plans for future capital spending dipped slightly from November's levels.

Profitability reports showed no change from November with weaker sales often blamed for lower profits while higher sales volumes were credited when profits increased.

The survey also revealed that financing concerns have eased slightly with fewer owners citing it as their top problem compared to previous months.

The data collected by NFIB's Research Center provides insights into small business trends through surveys conducted quarterly since late 1973 and monthly since 1986. The latest survey results were compiled in December 2024.