WASHINGTON, D.C. (March 10, 2026) – The NFIB Small Business Optimism Index fell 0.5 points in February to 98.8 but remained slightly above the 52-year average of 98. The Uncertainty Index decreased three points from January to 88.

“Although optimism declined slightly, small businesses report feeling more certain in February as they look toward the coming months,” said NFIB Chief Economist Bill Dunkelberg. “High sales and increased profits made February a more positive month for many owners, but competition from large businesses is putting stress on Main Street firms as they navigate the current economic climate.”

In conjunction with the February report, NFIB also released a new episode of the NFIB Research Center’s “Small Business by the Numbers” podcast. Listen to the latest episode here.

Key findings include:

• The Employment Index ticked up nearly a point in February to 103.5, 3.5 points above its historical average of 100 and 2.3 points above its 2025 average. This gain was driven primarily by its compensation-related components rather than employee-count related ones.
• Fifteen percent of small business owners cited labor quality as their single most important problem, down 1 point from January and the fourth consecutive monthly decline. The last time labor quality, reported as the top issue, was this low was in April 2020.
• A net 1% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up 7 points from January. The percent reporting actual sales gains are now close to the historical average of a net 0%. The last time actual sales were this high was in May 2022.
• The net percent of owners expecting higher real sales volumes fell 8 points from January to a net 8% (seasonally adjusted). This more than erased the strong, 6-point gain observed in January.
• In February, 59% of small business owners reported that supply chain disruptions affected their business to some extent, a decrease of 3 points from January.
• The net percent of owners raising average selling prices fell 2 points from January to a net 24% (seasonally adjusted). This marked the third consecutive month that actual price increases slowed, though the changes remain well above the historical average.
• Seasonally adjusted, a net 34% reported raising compensation, up 2 points from January and the highest level since March 2025.
• The frequency of reports of positive profit trends rose 7 points from January to a net negative 14% (seasonally adjusted). The last time earnings trends were this high was in December 2021.
• When asked to evaluate the overall health of their business, 12% rated it as excellent (down 2 points), 55% as good (up 1 point), 26% as fair (down 1 point), and 5% as poor (up 1 point).
• Eight percent reported competition from large businesses as their single most important problem, up 2 points from January. The last time competition from large businesses, reported as the top issue, was this high was in May 2021.

As reported in NFIB’s monthly jobs report, the NFIB Small Business Employment Index rose nearly 1 point from January to 103.5, showing further tightness in the small business labor market. The current reading is 2.3 points above the 2025 average of 101.2 and 3.5 points above the historical average of 100.

A seasonally adjusted 33% of all small business owners reported job openings they could not fill in February, up 2 points from January. Of the 54% of owners hiring or trying to hire in Month, 85% reported few or no qualified applicants for the positions they were trying to fill. A seasonally adjusted net 12% of owners plan to create new jobs in the next three months, down 4 points from January and the lowest level since May 2025 but remaining close to their average of a net 11%.

Labor costs reported as the single most important problem for business owners was 9%, unchanged from January. Seasonally adjusted, a net 34% reported raising compensation, up 2 points from January and the highest level since March 2025. A seasonally adjusted net 22% plan to raise compensation in the next three months.

Fifty-four percent of owners reported capital outlays in the last six months, down six points from January. Of those making expenditures, 37% reported spending on new equipment, 28% acquired vehicles, and 15% improved or expanded facilities. Ten percent spent money on new fixtures and furniture and 5% acquired new buildings or land for expansion. Eighteen percent (seasonally adjusted) plan capital outlays in the next six months, unchanged from January.

A seasonally adjusted net 1% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, up 7 points from January. The last time actual sales were this high was in May 2022. While actual sales volumes rose in February, sales expectations declined. The net percent of owners expecting higher real sales volumes fell 8 points from January to a net 8% (seasonally adjusted). The percent of owners reporting poor sales as their top business problem rose 2 points from January to 11%.

The net percent of owners reporting inventory gains fell 6 points from January to a net negative 3%, seasonally adjusted, likely due to increased sales. Not seasonally adjusted, 10% reported increases in stocks and 18% reported reductions. A net negative 2% (seasonally adjusted) of owners viewed current inventory stocks as “too low” in February, up one point from January. A net negative 2% (seasonally adjusted) of owners plan inventory investment in the coming months, unchanged from January in spite of the surge in sales and resulting inventory reductions.

Seasonally adjusted, a net 28% plan price hikes in the coming months, down 4 points from January’s reading. The net percent of owners raising average selling prices fell 2 points from January to a net 24%, seasonally adjusted. Unadjusted, 35% of owners reported higher average selling prices and 11% reported lower average prices. Both planned hikes and actual price changes remain above their historical averages.

Twelve percent of owners reported that inflation was their single most important problem in operating their business, unchanged from January and ranking as the third top issue.

The frequency of reports of positive profit trends was a net negative 14% (seasonally adjusted), 7 points higher than in January and the highest reading since December 2021. Among owners reporting lower profits, 28% blamed weaker sales, 19% cited usual seasonal change, 13% blamed the rise in the cost of materials, 9% cited changes in the price of their product or service, 7% cited labor costs, and 7% reported insurance costs. For owners reporting higher profits, 61% credited sales volumes, 12% cited higher selling prices, and 11% cited usual seasonal change.

Twenty-five percent of all owners reported borrowing on a regular basis, unchanged from January. A net 5% reported their last loan was harder to get than in previous attempts, up 2 points from January, and a net negative 3% reported paying a higher rate on their most recent loan, up 3 points. Four percent of owners reported that financing and interest rates were their top business problem in February.

In February, the net percent of owners expecting better business conditions fell 3 points from January to a net 18% (seasonally adjusted). This level is still well above its historical average of a net 4%.

Fifteen percent (seasonally adjusted) of owners reported that it is a good time to expand their business, unchanged from January. When asked to rate the overall health of their business, 12% of owners reported excellent (down 2 points), and 55% reported good (up 1 point). Twenty-six percent reported the health of their business as fair (down 1 point) and 5% reported poor (up 1 point).

The percent of small business owners reporting taxes as their single most important problem rose 1 point in February to 19%. Ten percent of owners reported government regulations and ret tape as their top issue, and 9% reported the cost or availability of insurance.

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in February 2026.