2025 Midyear Business Leaders Outlook: Advancing into the future—rain or shine
Business owners are pushing ahead, fine-tuning costs, tech and financing rather than waiting for an all-clear signal.
America’s small businesses aren’t just hoping things get better — they’re actively working to keep challenges under control. The Chase 2025 Midyear Business Leaders Outlook Pulse surveyed 563 decision-makers in June 2025. The results find leaders candid about stubborn cost pressures, cautious about policy shifts and, most importantly, actively adapting by changing pricing, technology, hiring plans and financing in real time to keep the wheels turning.
Cost pressures: inflation endures, tariffs emerge
Inflation is still the number one headache for business owners — a title it’s held for three straight waves (35% in May 2024, 37% in Nov 2024 and again the top pick this June). This is true in every region, with the South feeling it most intensely.
However, inflation isn’t holding up growth plans. 40% of business owners now say they plan to “keep growing, full speed ahead,” up from 33% in November 2024; just 25% are tapping the brakes and 35% aim to maintain. Their preferred levers remain pragmatic: trimming non-essential spend and selective price bumps outrank delaying investment or hiring freezes.
Materials and other cost-of-goods inputs are ranked in the top three drivers of higher expenses for 57% of business owners, while new tariffs are ranked in the top three for 48%.
Where are costs biting hardest?
- Location: South — More respondents in the Southern region reported inflation in their top three worries than the national average.
- Industry: Retail, Hospitality/Restaurant, and Manufacturing — Respondents in these industries cite tariffs in their top three slightly more than other industries.
For the first time in the survey history, tariffs have entered the conversation: nearly one in four respondents cite them as a top-three challenge, bumping “uncertain economic conditions” off the list.
58% of respondents are concerned about tariff changes, and 54% expect them to dent profits — but 63% feel “extremely or very” confident they can blunt the impact — many by switching suppliers, renegotiating contracts or passing along costs. That blend of vigilance and self-assurance mirrors their stance on inflation: owners acknowledge the pressure, but believe they have the tools, and the customers, to push through.
Nearly 6 in 10 (58%) are worried about new tariffs.
Significantly more survey respondents are also bracing for a 2025 recession — 39%, up from 24% last November.
Who is anticipating a recession—and who isn’t?
- Location: Northeast and Midwest — Recession worry runs noticeably higher for respondents from these locations than the average.
- Location: South and West — Fewer than half of respondents from these locations predict a 2025 recession.
- Industry: Construction, Manufacturing and Hospitality/Restaurant — Respondents in these industries are all less likely than average to forecast a downturn.
Looking ahead with resolve
Cost clouds aside, owners’ outlook on their own businesses is sunny, with 66% of respondents reporting being more optimistic about their businesses than any time in the last five years. 78% report believing that their teams and customers can “weather any storm”, and more than half (76%) are expecting higher profits this year, up nine points from November 2024.
While national economy optimism has waned — dipping from 55% in November back to 50% — optimism in the global and local economies, industry performance and company performance are holding steady.
Seventy-two percent believe that, going forward, small businesses will be key drivers in U.S. growth.
76% of respondents expect higher profits this year.
Optimism outlook
| June 2025 | Nov 2024 | Nov 2023 | |
|---|---|---|---|
| Global economy | 46% | 45% | 43% |
| National economy | 50% | 55% | 43% |
| Local economy | 58% | 60% | 46% |
| Industry performance | 73% | 71% | 63% |
| Company’s performance | 76% | 75% | 69% |
A customer-first growth playbook, powered by AI
In a year where tariffs and inflation could easily shift attention inward, small business leaders are focusing on the outward-facing moves they believe will keep customers loyal — and growing. Nearly half (46%) say their top focus for the second half of 2025 is adding new customers, while 38% are concentrating on retaining and better serving the ones they already have.
The tools they’re using to deliver that growth are evolving fast: 34% of business leaders say they plan to adopt AI-based tools before year-end, and that number jumps to 80% when looking out to 2026. While some see AI as a driver of back-office efficiency, the top reported use of AI is analyzing customer data, underscoring the focus on customers as part of overall growth strategies.
80% of respondents plan to explore AI-based tools by 2026.
An industry lens on AI
- Health/Medical, Retail, and Hospitality/Restaurant respondents are furthest along. Most respondents in these industries have already started or are expanding their use of AI.
- Hospitality/Restaurant respondents plan to leverage AI for marketing and customer data analytics more than those from other industries.
- Retail respondents plan to implement AI more for operations than those from other industries.
- Construction respondents are notably cautious and significantly more likely to say they may not adopt AI at all.
Talent tactics evolve
Over half of respondents say they’ll expand their full-time staff in the next 12 months, largely to support rising sales and new service lines. At the same time, finding the right people is getting tougher. Half of respondents (50%) are now “extremely” or “very” concerned about locating candidates with the skills their businesses need — significantly higher than six months ago. To stay competitive, most survey respondents reported intending to raise wages, offer more flexible schedules and invest in up-skilling programs that lift current employees into hard-to-fill roles.
While concerns about rising healthcare costs are affecting hiring plans (33% of businesses cite uncertainties about higher insurance costs as a reason to restrain their hiring), benefits remain a strong talent attraction and retention tactic. Nearly eight in ten respondents already provide health insurance, and among those who intend to increase coverage, 63% are doing so to offer a higher-quality plan. More than one-third (36%) of respondents cite attracting new talent as the reason behind increasing coverage.
Among businesses that are considering discontinuing, reducing or switching, 55% cite economic uncertainty as the key reason.
Half (50%) of respondents are highly concerned about finding candidates with the right skills.
Financing the next phase
Growth plans need fuel — and owners plan to secure it. More than half of respondents anticipate higher capital expenditure and credit needs in the year ahead, and 86% are actively considering some form of financing during the next 12 months, with marketing emerging as the single biggest reason to raise fresh capital.
How they’ll fund that spend is shifting. Sixty-five percent of respondents report exploring an online lender in 2024, up 10% since November. At the same time, nearly half (48%) say they’ll tap a business credit card; use of personal cards and crowdfunding are both up significantly from November.
But not every firm is shopping for capital. Among the quarter that isn’t, economic uncertainty and still-high rates now outrank “sufficient capital generated internally” as the top reasons to sit tight.
Taken together, the findings paint a picture of resourceful business owners broadening their financing toolbox.
65% of small-business owners tested the online-lending waters last year, a record high for the survey.
Look back
Explore the Chase 2025 Business Leaders Outlook survey to see how business leaders’ expectations have changed since the beginning of the year.
About the Chase 2025 Midyear Business Leaders Outlook survey
The 2025 Midyear Business Leaders Outlook Pulse survey was conducted online June 5–16, 2025, among 563 U.S. businesses with annual revenue between $100,000 and $20 million. Results have a margin of error of ±4.1% at the 95% confidence level.
