The National Federation of Independent Business (NFIB) Small Business Optimism Index decreased by 0.9 of a point in March to 88.5, the lowest level since December 2012.

March is the 27th consecutive month below the 50-year average of 98. The net percent of owners raising average selling prices rose seven points from February to a net 28% seasonally adjusted.

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since 1973 and monthly surveys since 1986, according to a news release. Survey respondents are randomly drawn from NFIB’s membership. This survey was conducted in March 2024.

The report did not share state-specific data, but NFIB State Director Matt Everson highlighted how elevated costs underscore the need for tax relief in Iowa this legislative session.

“To keep up with elevated costs, small business owners must pass higher prices onto their customers. This puts job creators in a difficult position, as inflation continues to rob the purchasing power of hardworking families,” Everson said in a prepared statement. “This report underscores the importance of further reducing Iowans’ tax burden and protecting taxpayers from future increases.”

As reported in NFIB’s monthly jobs report, a seasonally adjusted 37% of all owners reported job openings they could not fill in the current period.

Seasonally adjusted, a net 38% reported raising compensation in the March survey, up three points from February’s lowest reading since May 2021. A net 21% (seasonally adjusted) plan to raise compensation in the next three months, up two points from February, per the jobs report.

Owners’ plans to create new jobs have slowed with a seasonally adjusted net 11% planning to create new jobs in the next three months, the lowest level since May 2020.

Twenty-five percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs), up two points from February. The percent of small business owners reporting labor quality as their top small business operating problem rose two points from February to 18%. Owners reporting labor cost as the single most important problem decreased by one point to 10%, which is three points below the highest reading of 13% reached in December 2021.

Other key findings from the March survey include:

• The net percent of owners who expect real sales to be higher decreased eight points from February to a net negative 18% (seasonally adjusted).
• Fifty-six percent of owners reported capital outlays in the last six months, up two points from February. Of those making expenditures, 38% reported spending on new equipment, 24% acquired vehicles, and 17% improved or expanded facilities.
• A net negative 10% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up three points from February. The net percent of owners expecting higher real sales volumes declined eight points to a net negative 18% (seasonally adjusted).

To read the full report, visit nfib.com.