US small business optimism drops to lowest in nearly a year

[WASHINGTON] Sentiment among US small business owners dropped in March to the lowest level in nearly a year, as the war with Iran pushed up energy costs and stoked economic uncertainty. 

The National Federation of Independent Business (NFIB) optimism index slipped for a third straight month to 95.8, based on figures released on Tuesday (Apr 14).

The survey, which was conducted after the US and Israel launched the Middle East conflict, indicated less optimism about the outlook for earnings and the economy.

NFIB chief economist Bill Dunkelberg said: “The dramatic spike in oil prices has spooked consumers and owners alike.

“Small-business owners are having to absorb those higher input costs and pass them along to their customers.”

The net share of owners who expect business conditions to improve declined seven points to 11 per cent, the lowest since October 2024.

Those planning capital expenditures in the next three to six months shrank to the lowest since 2009, and the uncertainty index climbed higher. 

The net percentage of businesses reporting positive profit trends slid 11 points to a five-month low. The net share of owners who said they expect inflation-adjusted sales to improve edged lower.

The net share of companies expecting to increase employment was unchanged from February, remaining at the lowest levels seen in nearly a year.

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The survey also showed the share of owners who raised average selling prices edged higher to a net 25 per cent, after three straight declines in the months prior to the war in Iran.

However, a net 24 per cent plan to raise their prices in the next three months, the lowest share since July 2024. BLOOMBERG