(TNND) — Small business optimism surged after President Donald Trump’s election, with entrepreneurs buoyed by expectations of lower taxes and less regulation.

But the National Federation of Independent Business' optimism index released Tuesday fell, with the group saying uncertainty was "high and rising on Main Street."

The NFIB Small Business Optimism Index fell 2.1 points in February to a reading of 100.7.

That’s still above the 51-year average of 98, but it’s down 4.4 points from the December peak.

Small business optimism increased in October, November and December before falling in January and February.

NFIB Executive Director of Research Holly Wade said small business owners were excited by the prospect of Trump and congressional Republicans extending the 2017 tax cuts.

The 2017 law lowered the corporate tax rate from 35% to 21% and made changes to the individual tax code, which includes small businesses.

The change in the corporate tax rate was permanent.

But the provisions affecting households and small businesses are set to expire at the end of 2025, Adam Michel, the director of tax policy studies at the Cato Institute, previously told The National News Desk.

Wade also said small business owners were looking forward to a more “friendly regulatory environment.”

“They have been struggling to deal with the onslaught of regulations, proposed regulations in operating their business,” she said.

Wade said the small business environment is “still very healthy,” noting that the NFIB survey found two-thirds of respondents assessed the health of their business as either good or excellent.

But she said the small business owner excitement over lower taxes and less regulation has “moderated a bit over the last two months, and uncertainty has escalated over that same time frame.”

She said their latest survey was conducted before the most-recent tariff developments, though she said they still saw a lot of conversations over tariffs.

“So, we'll have a better sense of what that looks like for small business owners in the next month or two. ... But small business owners in those industries that are directly impacted will certainly be affected by the tariffs,” Wade said.

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Investment plans seem to be on hold for many small business owners, Wade said.

The net percent of owners expecting the economy to improve fell 10 points from the month before.

NFIB said 12% (seasonally adjusted) of owners reported that it is a good time to expand their business, down five points from January. That’s the largest monthly decrease since April 2020.

Meanwhile, the net percent of small business owners raising average selling prices rose 10 points from January to a net 32% (seasonally adjusted). NFIB said that’s the largest monthly increase since April 2021 and the third highest in the survey’s history.

The NFIB’s optimism index is based on surveys from small companies across a broad scope of industries. The NFIB has collected small business economic trends data with quarterly surveys since 1973 and monthly surveys since 1986.

The labor situation is still challenging for a lot of small business owners, Wade said.

Almost one in five are saying that labor quality is their top business problem, edging out inflation for the first time in a while.

Another 12% are saying that labor costs are their top business problem.

“They're still up against some headwinds in trying to fill those open positions,” Wade said.

She said small businesses in the retail, construction, transportation and manufacturing sectors are having the hardest time finding enough workers.

While small business optimism has come off its high from a couple of months ago, Wade noted that it’s still up a lot from a year ago.

The NFIB Small Business Optimism Index, currently 100.7, registered an 89.4 in February 2024.