NFIB’s small-business optimism index dips slightly in March after surge at end of 2016

The National Federation of Independent Business (NFIB) reported that its index of small-business optimism fell 0.6 points in March to 104.7, but was still at “historically high levels.”

The index had jumped from 94.9 in October to 98.4 in November and 105.8 in December. Since posting a reading of 105.9 in January, the measure of small-business optimism slipped back to 105.3 and February and then the 104.7 reading in March.

The NFIB contended that the minor decline in the latest month indicates that “the remarkable surge in small business optimism that began in November of last year was sustained in March.”

“Small business owners remain optimistic about the future of the economy and the direction of consumer confidence,” NFIB President and CEO Juanita Duggan said in a news release. “We are encouraged by signs that optimism is translating into economic activity, such as capital investment and job creation.”

One potential red flag in the March small-business optimism report was a significant increase in the uncertainty index, a subset of data on how small-business owners see the near-term future.

“The uncertainty index hit 93 in March, which is the second highest reading in the survey’s history,” NFIB Chief Economist Bill Dunkelberg said in the release. “More small business owners are having a difficult time anticipating the factors that affect their businesses, especially government policy.”

The NFIB noted that most of the March data for the index was collected before Congress failed to pass a bill to repeal and replace the Affordable Care Act, or Obamacare. The organization contended that a “big reason for the soaring optimism of the past five months is the expectation among small business owners that Obamacare and other burdensome policies will be reversed by Congress and the new administration.”

Duggan added, “Congress’s failure to keep its promises could dampen optimism, and that would ripple through the economy.”

The NFIB is a small-business association with offices in Washington, D.C. and all 50 state capitals. The organization says it aims to help small and independent business owners speak out on public policies that influence their businesses.