The National Federation of Independent Business (NFIB) Small Business Optimism Index dropped by 0.2 points in January to 99.3, remaining above its 52-year average of 98. Of the ten components that make up the index, three increased and seven decreased. The most notable change was a six-point rise in expected real sales volume. The Uncertainty Index increased by seven points from December, reaching 91, largely due to more business owners reporting uncertainty about whether it is a good time to expand.
“While GDP is rising, small businesses are still waiting for noticeable economic growth,” said NFIB Chief Economist Bill Dunkelberg. “Despite this, more owners are reporting better business health and anticipating higher sales.”
Jon Boesche, Minnesota State Director for NFIB—a group that advocates for small business interests in state policy and legislation according to the official website—commented on local challenges: “The Uncertainty Index increased in January, and finding skilled workers for specialized trades here is still a daily fight,” he said. “The latest mandates that took effect this year, like the Paid Leave mandate, have made hiring and maintaining a workforce considerably more difficult. As we head into the legislative session, lawmakers must prioritize reforms that will help Minnesota small business owners feel more confident.”
This month’s report also introduced the new NFIB Small Business Employment Index, which condenses several jobs-related survey questions into one measure. In January it stood at 101.6—about 1.5 points above its historical average—indicating a balanced labor market.
Other key findings from January include:
– Thirteen percent of respondents identified insurance costs or availability as their main concern—the highest level since December 2018.
– Sixty percent reported capital outlays over the past six months, up four points from December.
– A net negative six percent reported paying higher interest rates on recent loans—a drop of three points from December—which may signal improving credit conditions.
– Sixteen percent cited labor quality as their primary issue; this figure has declined for three consecutive months.
– A net sixteen percent expect higher real sales volumes next quarter—a six-point increase over December.
– Inventory gains were reported by a net three percent of owners (seasonally adjusted), with actual increases noted by fourteen percent and reductions by seventeen percent.
– Sixty-two percent experienced some supply chain disruptions—a slight decrease from December—with four percent reporting significant impact.
– Twenty-six percent raised average selling prices (down four points from December), while thirty-two percent plan further price increases in coming months.
Overall business health improved: fourteen percent rated their situation as excellent (up five points), fifty-four percent as good (unchanged), twenty-seven percent as fair (down seven points), and four percent as poor (up one point).
According to NFIB’s monthly jobs report, thirty-one percent had unfilled job openings they could not fill—still above the long-term average—and eighty-eight percent of those hiring found few or no qualified applicants.
Capital expenditures saw an uptick but future plans weakened slightly; eighteen percent plan outlays in the next six months (seasonally adjusted), historically considered low.
Among other concerns:
– Eighteen percent cited taxes as their top problem—the highest-ranked issue currently facing small businesses in Minnesota as supported by advocacy efforts detailed on NFIB’s website.
– Twelve percent identified inflation as their main challenge; nine cited government regulations and red tape.
– Poor sales were named top problem by nine percent; competition with large businesses remained steady at six.
The survey results reflect ongoing advocacy work conducted by organizations like NFIB Minnesota which supports small business owners statewide through resources and policy engagement. The data comes from surveys conducted among randomly selected NFIB members during January 2026.
A new episode of NFIB Research Center’s “Small Business by the Numbers” podcast was released alongside this report.
