Trump’s incoming administration is fueling major optimism from small businesses

Small businesses are more optimistic now than they have been at any point over the last almost four years as President-elect Donald Trump heads into office, according to a new survey.

The National Federation of Independent Business (NFIB) optimism index gained eight points in November, bringing it to 101.7, its highest point on record since June 2021. The NFIB’s uncertainty index dropped 12 points to 98, which is below October and September’s scores but above August’s (92).

“The election results signal a major shift in economic policy, leading to a surge in optimism among small business owners,” NFIB chief economist Bill Dunkelberg said in a statement. “Owners are particularly hopeful for tax and regulation policies that favor strong economic growth as well as relief from inflationary pressures.”

Nine of the 10 components that make up the index grew last month, with the strongest growth coming from a 41-point increase in optimism for business conditions. A net 36% of small business owners expect the economy to improve, marking the most optimistic they’ve been since June 2020, when owners were navigating federal and state guidelines to reopen their businesses during the COVID-19 pandemic.

A net 14% of owners who participated in the survey believe now is a good time to begin expanding their businesses, with 28% planning capital outlays over the next six months. The percentage of owners who expect higher sales reached the index’s highest level since shortly before the pandemic kicked off in 2020. Since January 2022, owners have expected weaker sales.

Their biggest problems continue to be inflation and labor quality, with owners still experiencing difficulty finding talent to fill open positions. About 48% of owners reported finding few or zero qualified applicants.

In a statement, Trump’s team touted the report’s results as a sign that businesses “look forward to tax cuts, deregulation, and policies favorable to strong economic growth and operational expansion.”

The impact of Trump’s economic policies is still unclear, given his varying tariff threats and the potential impact of his deportation plans. His administration is expected to broadly embrace policies that favor cutting red tape around various industries. Trump has also pledged to halve energy costs in less than two years and enact a slew of tax cuts, including an extension of his 2017 Tax Cuts and Job Act.