Small business optimism has surged to its highest level in nearly three years following Donald Trump’s victory in the presidential election and the Republican Party’s control of both chambers of Congress.
The National Federation of Independent Businesses (NFIB) released data highlighting a dramatic shift in sentiment among small business owners since the election results were announced.
The NFIB report shows that optimism among small business owners is now at its most elevated point since June 2021.
Chief Economist Bill Dunkelberg attributed this spike to the expectation of significant changes in economic policy under the new administration. “The election results signal a major shift in economic policy, leading to a surge in optimism among small business owners,” Dunkelberg stated.
The most striking data point was the net percentage of owners expecting economic improvement, which soared by 41 points. This represents the highest level of optimism recorded since Trump was last in office in June 2020.
“Main Street also became more certain about future business conditions following the election, breaking a nearly three-year streak of record-high uncertainty,” Dunkelberg added.
The past few years have been particularly challenging for small businesses, as elevated inflation and lingering effects of the COVID-19 pandemic created significant economic pressures. Unlike larger corporations, small businesses often lack access to the capital needed to withstand such challenges.
Despite these hardships, the latest NFIB survey suggests renewed confidence among entrepreneurs. The net percentage of owners expecting higher real sales volumes increased by 18 points to a seasonally adjusted 14%, marking the most positive outlook since February 2020.
Additionally, the proportion of owners who believe it is a good time to expand their businesses rose by eight points to 14%, the highest level since June 2021.
President Trump’s policy platform, which includes pledges to lower taxes, reduce energy costs through expanded domestic energy production, and streamline government regulations, is seen as a major driver of this optimism.
These proposals resonate with small business owners who view tax relief and regulatory reform as essential for economic growth and operational expansion.
“Owners are particularly hopeful for tax and regulation policies that favor strong economic growth as well as relief from inflationary pressures,” Dunkelberg noted. “In addition, small business owners are eager to expand their operations.”
The NFIB findings highlight the potential for a transformative period for small businesses under the Trump administration, driven by policies aimed at reducing barriers to growth and creating a more stable economic environment.