There is a renewed sense of optimism among small and midsize business leaders as they consider their business and economic prospects for the year ahead, according to JPMorganChase’s 2025 Business Leaders Outlook survey released today.
Close to 60 of the survey’s 2,644 respondents from various industries were from Michigan, says JPMorganChase.
Compared to a year ago, confidence in the national economy has jumped 12 percentage points to 55 percent among small business owners, and more than doubled from 31 percent to 65 percent among midsize business leaders.
This upbeat attitude extends to their own companies, with three-quarters of survey respondents expressing a positive outlook for the next 12 months.
Recession fears have eased, with 69 percent of small and 71 percent of midsize businesses either uncertain about or not expecting one in 2025. Inflation, however, remains a top concern as most small business owners are seeing an increase in business expenses, and more than three-quarters of midsize business leaders feel costs are rising.
“Businesses are entering 2025 with positive momentum after navigating a period of elevated inflation and interest rates better than expected,” says Ginger Chambless, head of research at JPMorganChase Commercial Banking. “We’ll be watching closely to see how this optimism extends throughout the year and influences companies’ growth strategies.”
The majority of the business leaders polled say they are feeling positive about the domestic economy — 60 percent of small and 59 percent of midsize businesses express confidence — but 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 percent), U.S. competition (18 percent), and concerns about China’s trade policies (17 percent, up 8 percentage points from last year). Still, nearly half (46 percent) plan to expand into new geographies in the next 12 months as they seek growth.
“Throughout history, business leaders have shown a remarkable ability to turn obstacles into opportunities,” says John Simmons, head of commercial banking at JPMorganChase. “As they navigate labor pressures, supply chain dynamics, and myriad other challenges, their tenacity and ingenuity will undoubtedly propel their growth in the coming year.”
Forty percent of small businesses and close to half of midsize businesses (46 percent) say labor shortages, retention, and recruiting are significant challenges. Many say they are considering tactics like increasing wages, offering flexible hours, or increasing benefits to address these issues.
“Small business owners tend to be upbeat by nature, but as the survey shows, we’re seeing particularly strong levels of optimism as we start 2025,” says Ben Walter, CEO of Chase for Business. “I look forward to seeing how that enthusiasm plays out in the economy.”
Buoyed by rising optimism, businesses are bullish when it comes to their companies’ performance projections for 2025. Among small business respondents:
- Two-thirds predict higher profits (67 percent) and sales (66 percent).
- Half (51 percent) plan to increase spending.
- The majority (64 percent) plan to invest more to support sales by adding products (35 percent), funding more advertising (34 percent) and increasing social media campaigns (31 percent), among other strategies.
Small businesses also are investing in technology to fuel digital transformation. Notably, 48% percent plan to add artificial intelligence (AI) applications to their business in the coming year. While nearly 80 percent of small business leaders say they are either implementing, already using or considering adopting AI, about half (46 percent) express concern about its potential impact on business.
Midsize businesses are similarly looking forward to stronger results in 2025:
- Nearly three-in-four (74 percent) expect revenues/sales to increase, up 13 percentage points from a year ago.
- 65 percent anticipate higher profits, up 10 percentage points.
- Half (51 percent) plan to add headcount, up seven percentage points.
- 38 percent are forecasting higher capital expenditures
To help drive this growth, slightly more than half of midsize businesses (53 percent) plan to launch new products and services, and 43 percent expect to engage in strategic partnerships and/or investments.
JPMorganChase’s Business Leaders Outlook survey was conducted online from Nov. 11-15, 2024 for small businesses (annual revenues between $100,000 and $20 million) and from Nov. 12-Dec. 4, 2024 for midsize businesses (annual revenues between $20 million and $500 million).
For more information, visit jpmorganchase.com.
