The National Federation of Independent Business (NFIB) in California commented on Mar. 10 regarding the latest Small Business Optimism Index, which showed a decrease of 0.5 points in February to 98.8, though it remained slightly above the long-term average of 98. The Uncertainty Index also dropped by three points to 88.
The topic is important as it reflects the current mood and challenges faced by small businesses across California, which are represented by more than 35,000 owners according to the NFIB’s official website. The organization acts as a leading voice for small businesses in the state and works to enhance economic opportunities according to its official website.
John Kabateck, state director for NFIB California, said, “With tax season upon us, I want to take this opportunity to once again thank every California small business owner who spoke up for keeping the 20% Small Business Tax Deduction alive and preventing it from expiring at the end of last year. I think of small business owners like Beth Booth from San Diego County, who is now chair of our leadership council, for traveling to Washington, D.C. to make a compelling case for preserving a valuable tool for small business solvency. It’s members like her and many others who provide optimism when it’s needed most.”
Bill Dunkelberg, chief economist at NFIB, said: “Although optimism declined slightly, small businesses report feeling more certain in February as they look toward the coming months. High sales and increased profits made February a more positive month for many owners, but competition from large businesses is putting stress on Main Street firms as they navigate the current economic climate.”
Key findings from the February index include that a net 34% reported raising compensation—the highest since March 2025—and reports of positive profit trends rose seven points from January. However, only 12% rated their business health as excellent while five percent rated it poor.
NFIB California advocates for small business interests through legislative engagement and provides resources such as legislative updates and support tools according to its official website. The organization also works to protect these businesses from excessive regulations and taxes while pushing for supportive policies according to its official website.
A new episode of NFIB Research Center’s “Small Business by the Numbers” podcast was released alongside this report. As economic conditions continue evolving, observers will be watching how policy changes and market pressures affect optimism among California’s independent business community.
