NFIB: Small Business Optimism Sees Post-Election Rebound | PYMNTS.com

Small business owners in the United States are more optimistic following an almost three-year stretch of uncertainty.

That’s according to the National Federation of Independent Business (NFIB), which released its latest edition of the Small Business Optimism Index Tuesday (Dec. 10). The index showed an eight-point jump in November to 101.7, following 34 months of sticking below the 50-year average of 98. It’s the highest reading since June 2021.

“The election results signal a major shift in economic policy, leading to a surge in optimism among small business owners,” said NFIB Chief Economist Bill Dunkelberg in a Tuesday press release. “Main Street also became more certain about future business conditions following the election, breaking a nearly three-year streak of record high uncertainty.”

Small business owners are especially hopeful for pro-growth tax and regulation policies, along with inflation relief, and are eager to expand, he said in the release.

A net 14% of small business owners think this is a good time to expand, an eight-point increase and the highest reading since June 2021, per the release.

The number of owners who anticipate higher real sales volumes climbed 18 points to a net 14% (seasonally adjusted), the highest reading since February 2020, the release said.

However, the finding that had the greatest impact on the index was the number of business owners expecting the economy to improve, up 41 points from October to a net 36%, the highest since June 2020, according to the release.

Meanwhile, PYMNTS Intelligence has been studying the pressures facing small- to medium-sized businesses (SMBs) in this period of uncertainty.

The report “End the Wait: SMBs and the Protracted Challenge of Delayed Payments” found that 60% of SMBs struggle with managing cash flow, a problem exacerbated by slowing processing and outdated, manual systems.

In the face of these manual processing constraints, many SMBs are embracing FinTech solutions. Despite a projected 50% jump in payment volumes and a 46% rise in invoicing in the next three years, many SMBs remain stuck with outdated systems.

“High costs and perceived complexity deter more than one-third from adopting automated solutions,” PYMNTS wrote in September. “But 64% are exploring tailored financial services through integrated software platforms. The shift toward cloud-based services is notable, with more than 80% of SMBs seeking these solutions to overcome inefficiencies.”

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