(TNND) — Small businesses ended 2025 with slightly more optimism and less uncertainty than in recent months, which could bode well for their outlook in 2026.
The National Federation of Independent Business’ December optimism index, released Tuesday, registered a 99.5.
That’s only a half point higher than November, but still marked a high point since summer.
And the NFIB’s uncertainty index hit an 18-month low.
Small business owners fared pretty well in 2025, said NFIB Executive Director of Research Holly Wade. And she’s expecting “cruising altitude” as they begin 2026.
“There were a few trips, certainly, at the beginning of the year with having to adjust to changes in policy, related to specifically tariffs,” Wade said. “But once they were able to get a grasp on kind of the rules of the road as far as tariffs were concerned and other policy changes, they moved forward, supported largely by consumer spending.”
The optimism index reading of 99.5 is hovering a bit above the long-term average of 98.
It’s lower than the post-election high of 105.1 last December, when small business owners were excited by the prospects of what Wade framed as a more friendly regulatory and policy environment under President Donald Trump.
Optimism took a hit in the spring as Trump unveiled his tariff plans before rebounding a bit over the summer and then settling into the high-90s range in the fall.
While optimism hasn’t fully returned to the level it was at a year ago, the latest reading was still higher than four of the previous five Decembers.
Close to two-thirds of businesses now rate their business health as good or excellent.
More small business owners are expecting better business conditions going forward, which is the primary reason the optimism index saw a slight uptick last month.
Wade said inflation pressures have eased.
And the labor market is good enough for most small businesses to operate or even expand if they want, aside from notable concerns over labor availability in construction and a few other industries.
FILE – People shop at a grocery store in Brooklyn on Dec. 12, 2025. (Photo by Spencer Platt/Getty Images)
The NFIB’s optimism index is based on surveys from small companies across a broad scope of industries.
Wade said the latest reading, 99.5, is the kind that is typically associated with a slower-to-moderate growth economy. She said it’s “a good, comfortable position for small business owners.”
Wade said the regulatory environment is already solid for small business owners, and some favorable tax provisions were already passed in last summer’s “One, Big, Beautiful Bill.”
Wade said small business owners have some lingering uncertainty over tariffs, but otherwise she doesn’t see any major changes, either good or bad, on the horizon for 2026.
Fewer small businesses said they were planning to raise prices or had raised prices in December, though Wade said a bigger share are still planning price hikes compared to historical norms amid ongoing price pressures and profit volatility.
But the drop in the uncertainty index showed more small businesses have a better feel for the environment they’re operating in, which is favorable to investments.
National Headline
