Provident Bank Economic Outlook Survey shows optimism and confidence in economy

Respondents in annual survey see increases in capital spending, hiring and tech investment – yet have worries about inflation and trade tensions

Optimism – and confidence. That’s the biggest takeaway from the annual 2025 Economic Outlook by Provident Bank of more than 1,000 business owners and leaders about their company the economic at large.

More specifically, respondents said businesses are increasing capital spending, investing in technology (specifically AI) and making modest increases in hiring.

It’s not all roses, however. When asked about challenges heading into 2025, respondents raised concerns around inflation, tariffs, rising consumer and national debt, employee wages and more.

“Our survey of business owners and senior executives reveals a strong sense of optimism for 2025, with a focus on growth and strategic expansion,” Provident CEO Anthony Labozzetta said.

“At Provident, we’re committed to being a trusted partner for our customers, no matter what the economic environment, empowering them with tailored financial solutions to help leverage opportunities and navigate challenges in both the macroeconomic landscape and growth plans within their own business.”

Here’s a greater look at the survey:

According to respondents, businesses are optimistic about the U.S. economy and business environment for 2025.

  • 60% of respondents believe the U.S. economy will be in much better or somewhat better shape one year from now;
  • 63% of respondents believe their own business will be in much better or somewhat better shape;
  • 68% of respondents anticipate a slight or significant increase in capital spending in 2025;
  • More than 50% of respondents anticipate a slight or significant increase in hiring for 2025, while 36% predict no changes in their hiring plans;
  • 69% of respondents are planning to adopt AI tools in their business within the next year, with 29% ready to implement them and 40% expressing interest but seeking to learn more about AI first.

At the same time, the data below highlights the need for leaders to prepare carefully to navigate the uncertainties that come with change.

  • When asked about challenges to the U.S. economy, the top three shared by respondents are inflationary pressures (60%), trade tensions and tariffs (51%), and rising consumer and national debt (44%);
  • Interestingly, while inflationary pressures are top-of-mind, executives are seeing minimal impact from the Federal Reserve’s interest rate cuts. When asked if the Fed rate cuts have positively impacted their business, 38% were unsure, and 30% said that they haven’t;
  • For business owners, the top challenges include employee benefits and costs (46%), inflation, including the rising costs of energy, fuel, goods, and services (46%), and rising wages (39%).

The survey was conducted by Pollfish, a market research provider, on behalf of Provident Bank. The findings are based on responses from 1,000 business owners and senior executives in the U.S. working for companies with over $1M in annual revenue.