Indiana small businesses see growth as nationwide optimism falls
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Indiana leaders are celebrating a strong start to 2026 for local entrepreneurs, even as economic stress weighs on small-business owners across the country.
Why it matters: Falling optimism scores nationwide signal growing unease over rising inflation and the war in Iran, according to the U.S. Chamber of Commerce.
State of play: The Chamber's recently released Small Business Index fell for a second consecutive quarter in early 2026, dropping from 68.4 at the end of 2025 to 67 (out of a possible 100).
- Researchers surveyed 750 small-business owners and operators who run companies with 500 or fewer people.
- The Midwest is the most confident region, with an index of 67.5. The West has the lowest index, at 66.6.
By the numbers: 53% of the small-business owners said inflation was their top challenge, up from 45% in the last three months of 2025.
- Only 37% said they expect to make new investments in the year ahead, down from 44% in Q4.
- Just 28% of small-business owners say the U.S. economy is in good health — down 10 points from the previous quarter.
Between the lines: The survey took place from Feb. 25 to March 11, and if it had been done before the war started, the results would have been less striking, Neil Bradley, an executive vice president at the U.S. Chamber of Commerce, tells Axios.
Reality check: The index is still higher than this time last year, after President Trump's "Liberation Day" tariffs crushed business confidence.
What they're saying: "While many small businesses say their own operations remain stable, the data show a clear downturn in sentiment that shouldn't be overlooked," Bradley said.
- "Views of the national and local economies have turned more pessimistic, concerns over inflation have jumped, and plans for future hiring and investment dropped markedly."
Zoom in: Indiana is home to more than 591,000 small businesses supporting 1.2 million jobs and representing 43% of all Indiana employees, according to the U.S. Small Business Administration's Office of Advocacy.
The latest: 19 businesses committed to locating or expanding in Indiana in the first quarter, per the Indiana Economic Development Corporation, pledging to create a total of 1,368 new jobs with average wages of $45.34 per hour.
- That's up from last year's record of more than $40 per hour.
- To support entrepreneurs, another $1 million was added to the state's Community Collaboration Fund to back community-led projects focused on education, tech enablement and acceleration.
Plus: In March, Gov. Mike Braun participated in the state's inaugural Entrepreneurship Through Acquisition Conference at Butler University, highlighting Indiana's focus on preserving locally owned businesses and supporting the next generation of owners.
- "Entrepreneurship isn't just about starting something new. It's also about stepping in, taking responsibility and growing what already exists," Braun said in a statement. "Indiana has thousands of strong businesses facing ownership transitions, and we need to make sure the next chapter keeps them rooted right here."
What to watch: So far, the deterioration in sentiment is all about how small-business owners see the future. But if the war goes on long enough, those expectations will drag on businesses' current decision-making.
- That's the risk you run, Bradley says.
Go deeper: Indiana startups survive longer than average