2026 Business Leaders Outlook: Reflections and predictions for what’s next
What did business owners learn from a year of rising costs, shifting labor markets and advancing AI?
- While business leaders navigated persistent inflation, surprise tariffs and tight labor markets in 2025, most ended the year on stronger footing, thanks to price adjustments, cost controls and operational changes.
- Nearly 80% of business leaders expect revenue or profit growth in 2026, with about one-quarter anticipating significant gains.
- Inflation remains the top expected challenge for 2026, followed by uncertainty around tariffs, interest rates and consumer demand.
- Hiring slowed but labor needs persist, as many businesses remain cautious due to cost pressures.
- AI adoption accelerated in 2025, with business owners increasingly using AI to improve efficiency, decision-making, marketing and financial management — a trend expected to increase in 2026.
There’s nothing small about the impact small businesses have on our country. These businesses don’t just drive our economy. They define our communities, create opportunities and inspire the next generation of dreamers and builders. As we enter the new year, it’s time to take a look back at how small business owners weathered 2025 and a look ahead at what they expect.
Business owners entered 2025 already bracing for uncertainty — and the year delivered plenty of it. Inflation lingered far longer than many expected, tariffs arrived unexpectedly and reshaped supply chains, and the labor market remained tight even as hiring intentions slowed.
Despite the headwinds, data from the latest Chase Business Leaders Outlook survey shows that business owners continued to adapt and strengthen their footing throughout the year.
In fact, the survey reveals a strong sense of ongoing optimism. While business leaders are less optimistic about the global, national and local economies, they expressed far greater confidence in their own companies and industries — suggesting that even in a complex macro environment, entrepreneurs are finding opportunity and momentum. As we reflect on the year past, Chase for Business is proud to support more than 7 million small businesses as they move ahead into 2026.
Survey respondents felt "Very Optimistic" or "Optimistic" about:
- Their own business: 74%
- Their industry: 73%
- The local economy: 57%
Optimism peaks in Salt Lake City
Respondents from Salt Lake City were more optimistic at every level, including global, national, local, industry and personal optimism. 88% expressed optimism for their own business, versus 74% of all respondents.
Reflecting the pendulum swing in expectations, 39% of Business Leaders Outlook respondents in our 2025 mid-year survey believed a recession was coming in the next year. In the latest survey, that share dropped to 27% — nearing the confidence seen in late 2024.
Business performance: Strength beneath uncertainty
Despite pronounced volatility, key business metrics show that many businesses ended 2025 in a stronger place than they began.
Smaller businesses faced steeper challenges
While overall optimism remained high, businesses with under $1 million in annual revenue were consistently less likely to feel positive about the state of their business across 2025.
For example, data from the JPMorgan Chase Small Business Macroeconomic Sentiment Tracker shows that in October 2025, 84% of large-revenue businesses felt "good" or "very good" about the state of their business, compared with just 60% of small-revenue businesses.
A brighter outlook for 2026
Moving into the new year, the Business Leaders Outlook survey reveals that nearly 80% of respondents are optimistic about their prospects for increased revenues and profits in 2026. A quarter said they are looking forward to a "significant increase" in revenues, and 27% are anticipating a "significant increase" in profits.
Cost pressure, tariffs and financial conditions: A three-part squeeze
Inflation, tariffs and tight financial conditions combined to squeeze businesses throughout 2025. Even as pressures evolved month to month, the cumulative effect shaped pricing, investment, staffing and long-term planning.
1. Inflation: The 2024 hangover continued
Throughout 2025, inflation remained a top concern. According to data from the Small Business Macroeconomic Sentiment tracker, roughly one-third of businesses each month reported that inflation was having a "large" or "major" impact on operations, with smaller firms disproportionately affected.
Businesses responded decisively. Rather than absorb rising costs, the tracker shows that 25%–30% of firms planned to raise prices in any given month, while fewer businesses were willing to accept smaller margins and opted instead to pass costs along to customers where they could.
How did businesses preserve margins in 2025?
The Business Leaders Outlook survey reveals a variety of strategies:
- 38% reduced non-essential expenses.
- 32% raised prices on all products and services.
- Businesses in the home services and construction industries were most likely to do so.
- 31% added new products or services.
- 30% raised prices on select products.
- 25% invested in technology to streamline operations.
- At 44%, manufacturing was the top industry to do so.
Heading into 2026, inflation worries don’t appear to be waning. In fact, business leaders cite inflation as the most common challenge they anticipate facing in the new year.
2. Tariffs: A surprise that reshaped costs and supply chains
The arrival of new tariffs mid-year caught many businesses off guard. While the overall impact of tariffs on expenses was less than many had feared, businesses are still feeling the impact on overall costs.
The Business Leaders Outlook survey results highlight the breadth of the impact:
- 24% of business leaders said their expenses increased by 6%–10%.
- 16% said cost increases were between 11% and 15%.
- In total, about 55% of businesses saw a total increase in expenses of 5% or more.
- Because of cost pressures, more businesses added new products (31% vs. 21% at mid-year).
- 26% of business leaders expect tariffs to help their business in 2026 (although only 16% of owners reported that tariffs helped their business in 2025), while 38% anticipate tariffs hurting their business.
San Francisco businesses least concerned about tariffs
Businesses in San Francisco may be more insulated from the effects of tariffs, as 43% of respondents from the city say they believe tariffs in 2026 will have no impact on their businesses, compared with 29% of the national sample.
We expect business leaders to be watching to see whether exemptions reduce cost burden, how quickly suppliers adjust pricing and whether consumers will continue absorbing some of the costs. They will also be keeping an eye on how ongoing policy decisions could influence margins, demand and planning in 2026.
3. Interest rates and credit: Improvement hoped for but not delivered
Last year, the Business Leaders Outlook survey indicated that 42% of owners expected rates to fall significantly, but lower rates did not materialize by the end of 2025.
With few expecting dramatic rate cuts in early 2026 and banks still cautious about lending, many business leaders are preparing for another year defined by strategic spending, cost management and measured investment.
Labor market: Uncertainty leads to slower hiring but not less need
As uncertainty grew in 2025, it weighed on hiring — but so did labor shortages. Despite a clear ongoing need, businesses were slow to hire, with some even hitting pause on hiring altogether. Many left roles unfilled while waiting for the “right” person to come along, throwing sand into the gears of the small business employment machine.
The Small Business Macroeconomic Sentiment tracker from September 2025 shows that the need for hiring is there:
- 36% of owners had at least one open role.
- Another 25% had recently filled a role.
- Most needed multiple hires: 2–5 for 46% of firms and 6–10 for 21%.
Why so cautious about hiring?
According to the 2026 Business Leaders Outlook survey, businesses that plan to limit hiring for 2026 offered various rationale:
- 37% named tariff and inflation uncertainty as a top three reason.
- 33% cited uncertainty about consumer demand.
- 28%–29% listed worker cost concerns.
- 25% said they were limiting hiring in favor of using AI instead.
- 13% planned to grow international or part-time rather than domestic staff.
Still, competition for talent remains: 31% of businesses plan to increase their benefits in 2026, particularly health insurance, paid time off and retirement contributions.
Manufacturing and healthcare industries will be a bright spot
Compared with other industries, businesses in the manufacturing and healthcare industries have significant plans to grow headcount and raise compensation in 2026, according to the 2026 Business Leaders Outlook survey.
More staff
- 72% of healthcare owners expect to increase either full-time or part-time headcount in 2026.
- 69% of manufacturers expect to do the same.
Higher pay
- 62% of healthcare employers expect to raise compensation in 2026.
- 64% of manufacturers expect to do the same.
Technology and AI: Adoption is on the rise
If 2024 was the year many businesses first experimented with AI, 2025 was the year they began implementing it more strategically.
The Business Leaders Outlook survey reveals that business leaders are simultaneously excited and apprehensive about what AI might bring to the table:
- 59% believe AI will be essential to small business competitiveness within three years.
- Manufacturers (72%) and retailers (69%) were most likely to believe this.
- 61% believe it will help their specific business operate more efficiently.
- More than half (55%) worry about the loss of human touch with AI.
- Around half (48%) are worried about the impacts of AI on small business, while the other half report trusting AI generally.
- Retail businesses were more likely to report trusting AI.
- Businesses in healthcare were the most likely to report AI concerns around privacy and security.
How business owners expect AI to help in the future
Looking to the future, business leaders in our survey ranked the following AI use cases in their top two:
- Helping make better decisions (32%)
- Supporting new product/service ideas (28%)
- Improving marketing communications (24%–27%)
- Managing finances and supply chains more efficiently (22%–31%)
- Enabling operations with fewer employees (24%)
We expect to see AI adoption deepen and expand in 2026, as business leaders turn to AI to help them make decisions and increase efficiency. Still, businesses will continue to need support navigating challenges around trust, data privacy, implementation and integration with their human staff.
Social media remains the most well-developed tech for small business owners
Among Business Leaders Outlook survey respondents, 45% reported using a social media tool for more than a year, and 42% started using one in 2025. Only 13% of owners said they were not using social media for their business.
The use of social media is even more developed than the use of other technology, with just over a third of small businesses reporting that they have been using expense management (37%) and payment processing (36%) for more than a year.
Preparing for another dynamic year
If 2025 proved anything, it’s that business owners remain strategic and determined. Despite inflation, tariffs, hiring hurdles and persistent uncertainty, most businesses strengthened their financial position and continued investing in the future.
They raised prices carefully, adopted new technologies, improved operational efficiency, added new products and made thoughtful hiring decisions, all while navigating the unexpected.
And in an environment filled with questions, one thing is clear: Small business leaders are prepared — and even energized — for the year ahead.
About the data
The 2026 Business Leaders Outlook survey was conducted by Chase Insights from November 11 to November 26, 2025, and includes responses from 1,002 business leaders across industries such as professional services, retail and technology, and from all regions across the U.S., including major metro areas. The results are statistically valid with an error margin of ±3.1% at a 95% confidence level.
The Small Business Macroeconomic Sentiment tracker is conducted monthly by Chase Insights. Each month includes responses from 500 small business owners across industries and includes brick and mortar businesses. The results are statistically valid with an error margin of ±2.63% at a 95% confidence level and 2.20% at a 90% confidence level.
