Montana chapter of Independent Business cites uptick in optimism

(Missoula Current) An index conducted by the National Federation of Independent Business revealed a slight decline in optimism in January, though it remains above its 52-year average, the organization said.

The Small Business Optimism Index fell 0.2 points last month to 99.3, “but remained above its 52-year average of 98,” leaving organizational leaders in Montana content for now.

“The Index has been hovering above its 52-year average for a number of months now,” Ronda Wiggers, state director for NFIB in Montana, said in a statement. “It's a relief to those of us who remember when it consistently fell below it for the 34 consecutive months, post-pandemic.”

Of the 10 optimism index components, three increased and seven decreased, according to the results. Real sales volume was the only component with substantial upward change, increasing by 6 points.

The uncertainty Index also rose 7 points from December. A rise in owners reporting uncertainty about whether it's a good time to expand their business was the primary driver of the rise in the uncertainty index, the organization said.

Wiggers said it's unknown if optimism has finally found some staying power.

“(We'll) continue to push for policies in Helena and in Washington, D.C. that continue to push small businesses in the right direction, such as winning permanency of the 20% Small Business Tax Deduction from Congress and achieving lower income and property taxes from the Montana Legislature,” she said.

Wiggers noted the latest employment index, which translates multiple job-related questions into one single number. Currently, the index suggested a balanced labor market, coming in about 1.5 points above its historical average.

“While GDP is rising, small businesses are still waiting for noticeable economic growth,” said Bill Dunkelberg, the NFIB's chief economist. “Despite this, more owners are reporting better business health and anticipating higher sales.”

Highlights from the Latest NFIB Small Business Optimism Index

• In January, 13% reported the cost or availability of insurance as their single most important problem, up 4 points from December. The last time insurance reached this percentage was December 2018.
• Sixty percent of small business owners reported capital outlays in the last six months, up 4 points from December and the highest level since November 2023.
• In January, a net negative 6% of owners reported paying a higher interest rate on their most recent loan, down 3 points from December. This suggests that credit markets are turning more favorable for small borrowers.
• In January, overall reported business health improved from December, with more reporting it as excellent and fewer reporting it as fair. When asked to evaluate the overall health of their business, 14% rated it as excellent (up 5 points), 54% rated it as good (unchanged), 27% rated it as fair (down 7 points), and 4% rated it as poor (up 1 point).