Small and midsize business leaders are embracing 2025 with a renewed sense of optimism about their economic prospects, according to JPMorgan Chase’s latest Business Leaders Outlook survey.
More than half of small businesses surveyed — 55% — said they are confident about the national economy, up12% over last year. Some 65% of midsize businesses indicated they felt positive, more than doubling last year’s 31%.
Over 75% of individual businesses expressed confidence in their company’s future over the next 12 months, according to the survey.
Recession Fears Down, Inflation Fears Remain
Concerns about a recession are easing, as 69% of small businesses and 71% of midsize businesses indicating they are uncertain about or not expecting one in 2025. However, inflation continues to weigh heavily, with many small business owners reporting rising expenses. Over three-quarters of midsize business leaders also noted increasing costs.
“Businesses are entering 2025 with positive momentum after navigating a period of elevated inflation and interest rates better than expected,” said Ginger Chambless, Head of Research at JPMorgan Chase Commercial Banking.
Local Optimism Up, Global Challenges Persist
While confidence in local economies is strong — 60% of small and 59% of midsize business leaders surveyed reported optimism — the global outlook is more restrained. Business leaders cite uncertainty stemming from shifting global trade patterns, potential tariff impacts, and geopolitical tensions.
Among midsize businesses, top concerns include international tariffs (19%), domestic competition (18%), and China’s trade policies (17%), the latter showing an 8% increase compared to last year.
Despite these hurdles, nearly half (46%) of midsize businesses plan to expand into new markets over the coming year.
“Throughout history, business leaders have shown a remarkable ability to turn obstacles into opportunities,” said John Simmons, Head of Commercial Banking at JPMorgan Chase.
Labor Shortages Continue, Optimism Drives Growth
Labor challenges continue to strain businesses, with 40% of small businesses and 46% of midsize businesses citing difficulties in recruitment and retention. To combat these issues, companies are exploring strategies such as raising wages, offering flexible work hours, and enhancing benefits.
Meanwhile, optimism is driving plans for growth. Among small businesses, 67% expect higher profits, 66% forecast increased sales, and 51% plan to boost spending. Investments in technology, particularly artificial intelligence (AI), are a focal point, with nearly half (48%) planning to incorporate AI applications in 2025.
For midsize businesses, 74% predict rising revenues, 65% anticipate higher profits, and 51% plan to increase hiring. Additionally, 53% aim to launch new products and services, while 43% look to form strategic partnerships.
Focusing on Sustainable Growth
As businesses chart their paths forward, experts recommend strategies to ensure sustainable growth. These include conducting regular market research, unlocking working capital through improved inventory management, and embracing digital transformation through technologies like AI.
Developing robust risk management strategies and planning for business transitions are also highlighted as critical steps.
“Small business owners tend to be naturally optimistic, and the survey shows particularly strong levels of confidence as we start 2025,” said Ben Walter, CEO of Chase for Business.
About the Survey
The Business Leaders Outlook survey gathered insights from 2,644 U.S. business leaders between November and December 2024. Small businesses surveyed had revenues between $100,000 and $20 million, while midsize businesses reported revenues of $20 million to $500 million.