Small‑business optimism slipped

Small-business confidence fell in March, and the latest survey shows owners growing more cautious about hiring, spending, and sales. (nfib.com) The National Federation of Independent Business said its Small Business Optimism Index dropped 3.0 points to 95.8 in March, below the group’s 52-year average of 98.0 and the lowest reading since April 2025. Its Uncertainty Index rose 4 points to 92, far above its historical average of 68. (nfib.com) Profit trends drove much of the decline. The share of owners reporting positive profit trends fell 11 points to a net negative 25 percent, while the share expecting better business conditions dropped 7 points to a net 11 percent, the third straight monthly decline. (nfib.com) Owners also pulled back on near-term spending plans. Sixteen percent said they plan capital outlays in the next six months, down 2 points from February and the lowest level since November 2009, while a net negative 5 percent reported higher nominal sales over the past three months. (nfib.com) The tax fight around small firms has shifted since Congress passed the 2025 reconciliation law. Garrett Watson of the Tax Foundation told the House Small Business Committee on April 15 that the law made the Section 199A deduction for pass-through businesses permanent and preserved other provisions that had been set to expire at the end of 2025. (taxfoundation.org) Section 199A lets many owners of partnerships, S corporations, sole proprietorships, and some real estate investment trusts deduct up to 20 percent of qualified business income. Watson said the scheduled expiration of that break had added uncertainty for owners planning hiring and investment for 2026 and beyond. (taxfoundation.org) Watson also told lawmakers the tax code still leaves small firms dealing with “too complicated and confusing” rules, and he urged broader changes to cost recovery, tariff policy, and the treatment of losses. He said more predictable tax rules would support business formation and investment. (taxfoundation.org) The local summary in South Carolina tied the March survey to day-to-day pressure on Main Street. NFIB Chief Economist Bill Dunkelberg said a spike in oil prices had “spooked consumers and owners alike,” while state director Ben Homeyer said owners “need certainty” to keep hiring, investing, and growing. (myclintonnews.com) The split is now clearer than it was a year ago: Congress has locked in one major tax break for pass-through firms, but the March survey shows many owners still see weaker profits, softer demand, and less reason to expand right now. (taxfoundation.org, nfib.com)