Small Business Owners Remain Confident Despite Trade Challenges

September 10, 2025 at 01:00 AM EDT

SPONSORED CONTENT -- (StatePoint) Optimism for the future of the U.S. economy and business prospects is at an all-time high, according to a new survey of small and mid-size business owners.

Just one year ago in PNC’s Economic Outlook survey, a record 56% of respondents – which include business owners or financial decision makers at more than 500 small to mid-size businesses nationwide – reported optimism for the future of the U.S. economy. That number jumped to 58% in the latest survey, with optimism for business prospects climbing to 84%.

In contrast, is a declining number of respondents who say they expect demand or profits to increase in the next six months. Additionally, 46% of business owners say they are “extremely concerned” about inflation in the coming months, with one-third also reporting they are “extremely concerned” about the risk from higher tariffs and supplier prices.

Fears around prices

The top challenge business owners are facing is uncertainty around pricing. Fifty-one percent said they anticipate price increases from suppliers. That’s up from the 45% in the spring, but down significantly from a year ago (59%). Consequently, 58% of respondents said they expected to increase prices.

Among those who expect to raise prices, 54% are attributing increases to non-labor costs – a sharp increase from the 37% who answered that way in 2024. Fewer business owners reported the cost of labor (30%), or favorable market conditions (15%) as reason to raise prices.

Tariffs are playing a key role in pricing, according to respondents. Forty-eight percent reported that they believe tariffs are leading to increased prices that suppliers are charging them. Similarly, 46% reported that tariffs contributed to their decision to raise prices they charge customers.

“It’s a bit of a roller coaster effect when it comes to opinions on pricing over the last few survey cycles,” Faucher said. “As they weigh how tariffs may impact their business going forward, it seems many business owners accept that price increases are likely, but perhaps not as definitive as a year ago.”

A pause on hiring

As prices rise, business owners who reported planning to hire over the next six months dipped to just 13% (from 18% a year ago.) Respondents’ top hiring challenges were:

• Lack of skills or experience needed (30%)

• Lack of applicants (29%)

• Candidates’ inability to meet legal/security requirements (16%)

Fall Economic Outlook by the numbers:

• 44% of respondent believe a recession is likely in the next 12 months.

• 17% say higher tariffs have increased the level of inventory of their business. It mirrors the percentage of business owners who say tariffs have decreased their level of inventory;

• 52% say tariffs have had no impact at all on their level of inventory;

• 23% believe their cash reserves will be lower at this time next year, marking the first time in survey history that number has exceeded the percentage of respondents who feel cash reserves will be higher in a year (22%); and

• 24% believe Artificial Intelligence is the technology that will most impact their business over the next two years.

To see the full 2025 PNC Fall Economic Outlook Survey results visit pnc.mediaroom.com.

“While it may seem counterintuitive that business owners remain optimistic despite reporting fears around tariffs, inflation and profits, those concerns are still statistically lower than in other survey cycles,” said PNC chief economist, Gus Faucher. “After powering through a global pandemic, it’s unsurprising that leaders feel confident in their ability to prosper despite today’s challenges.”

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