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Small Business Sentiment Plummets Amid Economic Anxieties

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  Published in Business and Finance on Wednesday, January 14th 2026 at 12:19 GMT by UPI

Washington, D.C. - January 14, 2026 - A palpable sense of apprehension permeates the small business sector, with a significant majority forecasting a decline in the overall business environment this year, according to a newly released survey from the National Federation of Independent Business (NFIB). The Small Business Trends Survey, unveiled today, paints a picture of resilience tempered by anxieties surrounding persistent economic challenges.

The survey results reveal a stark divergence in sentiment. A worrying 53% of small business owners anticipate a worsening business climate in 2026, while a comparatively small 15% express optimism for improvement. This sentiment represents a significant shift from previous years, reflecting the ongoing impacts of a complex and evolving economic landscape.

The Core Concerns: Inflation, Supply Chains, and the Labor Crunch

The anxieties driving this pessimistic outlook are multifaceted and deeply rooted in ongoing economic realities. Chief among these concerns is persistent inflation. While headline inflation numbers have moderated from their peak in 2024, the 'stickiness' of certain costs - particularly in areas like food, energy, and transportation - continues to erode profit margins and squeeze small business budgets. Owners are finding it increasingly difficult to absorb these increased expenses, forcing them to either raise prices, impacting consumer demand, or accept reduced profitability.

Supply chain disruptions, initially stemming from the global pandemic and exacerbated by geopolitical instability, remain a significant impediment. While improvements have been made, bottlenecks persist, leading to unpredictable lead times, increased shipping costs, and difficulties securing essential materials. This uncertainty makes planning and inventory management considerably more challenging for small businesses, often impacting their ability to fulfill orders and meet customer expectations.

The chronic shortage of workers continues to be a critical issue. The 'Great Resignation' and a combination of factors, including demographic shifts, changing work preferences, and skills gaps, have left many small businesses struggling to fill open positions. This labor scarcity isn't just about finding employees; it's also driving up wage costs, further straining already tight budgets.

Adding to these pressures are concerns about government regulations and the tax burden. Small business owners often feel disproportionately impacted by compliance costs and complex regulatory frameworks. The ongoing debate around tax policy also contributes to uncertainty and can deter investment and expansion.

Resilience and a Glimmer of Optimism

Despite the overarching negativity, the NFIB survey also highlights a remarkable degree of resilience within the small business community. The vast majority of respondents are not simply succumbing to pessimism; they are actively seeking opportunities and adapting to the changing environment. A significant 40% of surveyed owners plan to increase capital investment in 2026, demonstrating a willingness to invest in their businesses and prepare for future growth. Furthermore, roughly the same percentage (40%) is contemplating hiring new employees, suggesting a potential for job creation even amidst economic uncertainty.

"Small businesses are the backbone of the American economy, and their outlook is a critical indicator of overall economic health," stated NFIB President Beth Milburn. "The challenges they face - inflation, labor shortages, supply chain issues - are impacting their ability to grow and invest. While the forecast is concerning, we are encouraged by the continued commitment and innovation displayed by these entrepreneurs."

The survey, based on responses from over 800 small business owners across the United States, was conducted in December 2025, offering a timely snapshot of the prevailing sentiment heading into the new year. The findings underscore the delicate balance facing small businesses as they navigate a period of economic uncertainty, demonstrating both vulnerability and determination in equal measure. The coming months will be crucial in determining whether these entrepreneurs can overcome the headwinds and realize their plans for investment and expansion.