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Inflation Fails to Dent Small Business Outlook

[ July 17, 2026   //   ]

Small business confidence was little changed in the second quarter, but the stability masks growing pressure from inflation and a pullback in investment plans, according to the latest U.S. Chamber of Commerce Small Business Index.

The quarterly index registered 66.5, compared with 67.0 in the first quarter and 65.2 a year earlier. While nearly seven in 10 owners rated their businesses as healthy, a growing number expressed concern about rising costs and the broader economic outlook.

Inflation was the leading concern for 57 percent of respondents, up from 48 percent a year earlier. Confidence in local economic conditions also weakened, with 33 percent rating their local economy as good, down from 41 percent in the second quarter of 2025. Positive views of the national economy remained largely unchanged at 30 percent.

Despite those headwinds, many owners remain optimistic about their own businesses. Sixty-six percent expect revenue to increase over the next year, up from 61 percent in the first quarter, while 35 percent expect to add employees, an improvement from 30 percent last quarter but still below the 42 percent recorded a year ago.

The survey also pointed to greater caution on capital spending. Only 38 percent of respondents said they plan to increase investment during the next year, essentially unchanged from the previous quarter but down from 47 percent a year earlier. Meanwhile, 69 percent said they were comfortable with their cash flow, compared with 72 percent a year ago.

“Small business owners are proving, once again, that they know how to adapt,” said Tom Sullivan, senior vice president of small business policy at the U.S. Chamber of Commerce. “The message this quarter is one of measured confidence.”

Separately, the Chamber said a new survey found growing adoption of artificial intelligence among small business employers, with respondents reporting that AI is improving productivity, enhancing work quality and allowing employees to take on more complex tasks.

The index is based on a survey of 751 small business owners conducted by Ipsos between May 19 and June 4.

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