A new report from the National Federation of Independent Business (NFIB) finds that small business owners in Washington are less optimistic about current business conditions than their counterparts nationwide, with labor costs, taxes, and regulations ranking among their top concerns.
According to the 2026 NFIB Washington Small Business Economic Trends report, the state’s Small Business Optimism Index stands at 94.5, compared with the national reading of 98.5. The report also found Washington businesses are less likely to plan for new hiring, with 5.3 percent expecting to increase employment compared with 15.4 percent nationally. Current job openings also trail the national average.
Labor costs emerged as one of the report’s most significant findings. Nineteen percent of Washington respondents identified labor costs as their single greatest challenge, more than double the national rate of 8.5 percent. Business owners in the state also reported greater concern about government regulations and taxes than respondents across the country.
The report noted that only 6 percent of Washington small business owners rated their business as “excellent,” compared with 12 percent nationally. Earnings trends also remained weaker than the national average.
Washington’s unemployment rate of 5.1 percent and Employment Index of 99.8 both lag national figures, according to the report. While Washington continues to rank among the nation’s strongest economies in overall gross domestic product and per capita income, the report suggests many small businesses continue to face challenges related to hiring, operating costs, and business growth.
The report concludes that small businesses, which employ about half of the state’s private sector workforce, continue to face economic pressures that may affect expansion plans and future investment. It also notes that policymakers may look to the findings as they consider future decisions related to taxes, labor policies, and regulatory requirements that influence the state’s business climate.
