What a difference a year makes.
Compared to a year ago, confidence in the national economy has jumped 12 percentage points to 55% among small business owners, and more than doubled from 31% to 65% among midsize business leaders, according to the JPMorganChase’s 2025 Business Leaders Outlook survey, which was released Tuesday morning.
The upbeat economic attitude extends to their own companies, with three-quarters of the business leaders expressing a positive outlook for the next 12 months.
Ginger Chambless, head of research at JPMorganChase Commercial Banking, said businesses are entering 2025 with positive momentum after navigating a period of elevated inflation and interest rates better than expected, she said.
“We’ll be watching closely to see how this optimism extends throughout the year and influences companies’ growth strategies,” she said.
There are multiple reasons for the optimism, the survey showed.
Small business respondents said this:
- Two-thirds predict higher profits (67%) and sales (66%);
- Half (51%) plan to increase spending;
- The majority (64%) plan to invest more to support sales by adding products (35%), funding more advertising (34%) and increasing social media campaigns (31%), among other strategies.
Small businesses also said they are investing in technology to fuel digital transformation. Notably, 48% plan to add artificial intelligence (AI) applications to their business in the coming year. While nearly 80% of small business leaders say they are either implementing, already using or considering adopting AI, about half (46%) express concern about its potential impact on business.
Midsize businesses are similarly looking forward to stronger results in 2025:
- Nearly three-in-four (74%) expect revenues/sales to increase, up 13 percentage points from a year ago;
- Nearly two-in three (65%) anticipate higher profits, up 10 percentage points;
- Half (51%) plan to add headcount, up seven percentage points;
- And 38% are forecasting higher capital expenditures
To help drive this growth, slightly more than half of midsize businesses (53%) plan to launch new products and services, and 43% expect to engage in strategic partnerships and/or investments.
Of course, it’s not all rosy.
The survey showed there are concerns, too.
While fears of a recession fears have eased, inflation remains a worry. Most small business owners are seeing an increase in business expenses, and more than three-quarters of midsize business leaders feel costs are rising.
And while the majority of leaders say they are feeling positive about the local economy — 60% of small and 59% of midsize businesses express confidence — the global outlook is more tempered, reflecting uncertainty around shifts in global trading patterns, potential tariff impacts and geopolitical tensions.
When identifying challenges for 2025, midsize businesses point to international tariffs (19%), U.S. competition (18%) and concerns about China’s trade policies (17%, up 8 percentage points from last year). Still, nearly half (46%) plan to expand into new geographies in the next 12 months as they seek growth.
Then there’s this common concern: The need to find talent – and retain it – remains a huge challenge.
Forty percent of small businesses and close to half of midsize businesses (46%) say labor shortages, retention and recruiting are significant challenges. Many are considering tactics like increasing wages, offering flexible hours or increasing benefits to address these issues.
