Continue Reading Below
The nation is still grappling with a raging pandemic that has infected more than 22 million Americans since March. The surging cases and reinstated restrictions are bringing great uncertainty for small businesses.
The NFIB Small Business Optimism Index indicated that small business optimism declined 5.5 points in December to 95.9, falling below the average value of the past 48 years and was described as "historically very large."
“Small businesses are concerned about potential new economic policy in the new administration and the increased spread of COVID-19 that is causing renewed government-mandated business closures across the nation," NFIB chief economist Bill Dunkelberg.
NFIB's 10-component index provides a snapshot into the state of small businesses, which account for roughly 47% of the private sector jobs.
While small business job growth continued in December, NFIB said those gains weren't even across all industries due to various state and local restrictions meant to curb the spread of the virus coupled with "consumer resistance to spend."
Overall, business owners who expected to see better business conditions over the next six months declined 24 points to -16%, according to the data.
The percentage of owners who planned to increase job employment declined to 17%, while owners thinking that it's a good time to expand fell to 8%.
Sales expectations over the next three months also declined to -4%.
While nine of the 10 components declined, one showed a record increase. The percentage of owners who said their inventory stocks are "too low" actually rose to 7%.