Small businesses face stagnation amid economic uncertainty, new report finds

Op-ed views and opinions expressed are solely those of the author.

U.S. small businesses are grappling with heightened economic uncertainty, rising costs, and cautious growth plans, according to the latest annual Small Business Economic Report released by the National Small Business Association (NSBA) on March 20.

Now in its 20th year, the comprehensive survey focuses this year on federal trade policy and reveals a small-business community facing increased costs, economic insecurity, and hesitancy to pursue significant growth. More businesses are avoiding external financing than at any point in the survey’s history, underscoring slower anticipated growth rates and a generally stagnant small-business economy.

Key findings from the NSBA 2026 Small Business Economic Report include the fact that more than half of small-business owners believe the economy is worse today than it was one year ago. The number of small businesses reporting an increase in revenues over the past year reached its lowest point in more than a decade. Just 18% of small-business owners hired employees in the past year, while 21% reduced their workforce, resulting in a net hiring deficit. And over half do not plan to hire in the coming year.

The majority of small businesses incurred increased costs in the past year, with 74% of those attributing the rises to tariffs. Nearly half of owners view current trade and tariff policies as heading in the wrong direction, with only 3% reporting positive impacts from tariffs. Economic uncertainty tops the list of concerns for small-business owners, followed closely by U.S. political instability.

On the benefits front, health insurance costs have risen to pre-pandemic levels of concern.

And there are some positive notes. One-third of owners now anticipate economic expansion in the coming year (an improvement), though only one-third say the current economy is better than it was six months ago. Despite challenges, two-thirds of owners remain confident in their business’s future, though just one-in-four are “very confident.” Top policy priority: Congress and the administration should “end partisan gridlock and work together,” the highest such sentiment since 2012.

“Economic uncertainty remains the dominant factor holding back more robust growth,” the report notes, with NSBA President and CEO Todd McCracken emphasizing that reluctance to seek financing signals broader stagnation. NSBA Chair Bill Belknap added that political leaders could positively impact these issues by addressing uncertainty and instability.

This outlook aligns with recent sentiment data from the National Federation of Independent Business (NFIB). In February 2026, the NFIB Small Business Optimism Index dipped slightly to 98.8, down from 99.3 in January and below expectations. While owners reported stronger sales and profits in some cases, competition from larger firms and persistent pressures weighed on confidence. The Uncertainty Index eased modestly but remained elevated.

Despite these headwinds, some positive notes emerge and include innovations designed to help smaller operations streamline processes and cut costs

The MetLife & U.S. Chamber of Commerce Small Business Index stood at 68.4 in the most recent quarter (Q4 2025 data, with ongoing monitoring into 2026), reflecting resilience even as inflation concerns linger.

Tech advancements offer potential relief, with recent announcements like Workday’s unveiling of Sana—a conversational AI tool for HR and finance—and Salesforce’s integrated AI agents with NVIDIA aimed at boosting enterprise efficiency.

Further positive developments include a surge in available grant opportunities for small businesses in March 2026, with programs like the Skip $10K Grants (offering two $10,000 awards to U.S.-based entrepreneurs) and various microgrants for women and minority-owned businesses providing critical non-dilutive funding to fuel growth and recovery.

Experts emphasize that while small businesses remain a cornerstone of the economy—employing millions and driving innovation—addressing policy uncertainty, cost pressures (especially from tariffs), and access to capital will be crucial for reigniting momentum in the months ahead.

As one NSBA representative put it, the report serves as a “call to action” for policymakers to prioritize Main Street stability amid broader economic shifts.

“Small businesses are pessimistic. No surprise. Trump’s policies have not been helpful, and small businesses have been tragically neglected for decades. The federal government works for the one-tenth of one percent of firms that are big businesses. (Small businesses are 99.9% of all businesses in America.) Big businesses get ‘small business’ contracts. They create no jobs to do that work because they’re big enough to do it. Real small businesses, on the other hand, would create millions of new jobs if they got the contracts we’re told they get, an economic stimulus, as intended by the 1953 Small Business Act. The good news is human nature, the desire to be free, to be one’s own boss, reflected in the record number of start-ups in the years since the pandemic. When we pressure Congress and congressional candidates to prove that only small businesses get ‘small business’ contracts, we’ll have the prosperity intended by law and, once again, a government of the people, by the people, and for the people,” said Bruce de Torres, Director of Communications for the American Small Business League.

DONATE TO BIZPAC REVIEW

Please help us! If you are fed up with letting radical big tech execs, phony fact-checkers, tyrannical liberals and a lying mainstream media have unprecedented power over your news please consider making a donation to BPR to help us fight them. Now is the time. Truth has never been more critical!