FOR IMMEDIATE RELEASE
Contact: John Kabateck, California State Director, john@kabstrat.com
or Tony Malandra, Senior Media Manager, anthony.malandra@nfib.org

SACRAMENTO, Calif., July 8, 2026—The National Federation of Independent Business (NFIB) today released a California-specific version of its nationally regarded monthly Small Business Economic Trends (SBET) report. The report highlights responses from California small business owners on a variety of issues compared to national averages from NFIB’s monthly SBET surveys.

“Small business optimism and small business health are both lower in California than in the rest of the country. Why? Well, unlike their counterparts in every other state, California’s small business owners are choking to death on government regulations,” said John Kabateck, state director for the National Federation of Independent Business (NFIB) in California. “We were warned of this two years ago, when NFIB released its quadrennial Small Business Problems & Priorities survey, showing ‘Unreasonable Government Regulations’ as the No. 1 problem – out of the 75 ranked – and besting the ‘Cost of Health Insurance,’ which held the top spot in every other state. In this state-specific SBET, government regulations again emerge as the top issue. It’s got to stop. We regulate just to regulate.”

The latest data marks the fourth consecutive month of underperformance for the state. And, “far fewer California owners say their small businesses are in excellent or good health,” according to the report.

Kabateck also noted the higher-than-national-averages in the Poor Sales, Labor Cost, and Cost and Availability of Insurance components as additional hurdles Main Street California enterprises must leap to remain in business.

From the ‘Top Issues’ page of the new report:

“For California, the standout issue by far is government regulation. Not only is it the number one issue in California by a comfortable margin (over poor sales), but it is also much, much worse than for businesses in the U.S. overall. More than 2.5 times as many California respondents identified regulation as their top issue as U.S. respondents (21 vs. 8).”

There are major negative differences between how California small businesses report their health and the U.S. averages. Far fewer California owners say their small businesses are in excellent or good health, and many more report that their small businesses are in fair or poor health. The deficits observed for this period (Oct. 2025-Mar. 2026) are almost the exact same as the previous period (Apr.-Sep. 2025), so the underperformance is consistent.

NFIB began publishing its Small Business Economic Trends (SBET) report quarterly, starting in 1973 and then monthly since 1986. The report tracks economic activity among small businesses in the U.S. The survey measures changes in sales, employment, investment, financing, and economic sentiment. While useful as a country-wide snapshot, no state can be defined by national numbers alone. Therefore, the NFIB Research Center has now launched new, semi-annual “State of the States” SBET reports for some of the largest states in the U.S. In order to create statistically meaningful numbers, responses from six monthly surveys are pooled together, creating summer (April-September) and winter (October-March) datapoints. These reports help signal the unique challenges and strengths of each state covered. The full state-specific SBET for California can be read at the link above or here. A brief, one-page history of the SBET can be read here.

Keep up with the latest California small business news at www.nfib.com. Follow us on X @NFIB_CA and on Facebook @NFIB.CA.
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For over 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.

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