Provident Bank, a New Jersey-based financial institution, released the results of its annual Economic Outlook Survey. The findings signal a decisive shift in business sentiment. While business owners remain mindful of inflation and trade tensions, the “wait and see” period of 2025 has ended, replaced by active expansion and investment for 2026.
The survey found that business owners are looking past the headlines, with over 50% believing the U.S. economy will be in a better position this year and over 60% expecting their own business to be in better shape. This confidence is translating into tangible growth strategies.
“This year’s data shows a clear transition from the passive optimism we saw last year to active investment this year,” Anthony Labozzetta, president and CEO at Provident Bank, said. “Business owners are no longer just hopeful about the future; they are funding it. We are seeing an uptick in plans for capital expenditures, hiring and technology adoption, signaling that companies are positioning themselves to accelerate in 2026.”
The survey data highlights include:
- Investment Spikes: 70% of businesses plan to increase capital expenditures in 2026, up from 68% last year. Most notably, high-conviction spending is on the rise, with the number of businesses planning a “significant increase” in spending jumping from 11% last year to 19% this year.
- Generational Divide: Younger leaders are driving the nation’s optimism, with 44% of Gen Z owners expecting their business to be in “much better shape” next year, compared to just 14.5% of Boomers. This divide extends to strategy: while Gen Z and Millennials are focused on aggressive expansion and navigating global trade tensions, Gen X and Boomers remain the stabilizing force, prioritizing operational efficiency and cost containment in the face of inflation.
- Hiring Heats Up: The workforce is set for expansion, with 57% of businesses planning to increase hiring, up from 53% last year. Similar to spending, hiring plans have more than doubled, with 17% of owners planning a “significant increase” in staff, compared to 8% a year ago.
- AI Becomes Standard: Engagement with AI has surged, with 58% of businesses either already using or planning to adopt AI tools in 2026, a sharp increase from 41% in last year’s survey.
While the outlook is positive, business leaders remain transparent about the challenges they face. Inflation remains the top concern for business owners, though the intensity of that concern has cooled, dropping from 60% last year to 49% this year. Meanwhile, uncertainty regarding trade and policy has increased, with 37% of respondents citing political and policy uncertainty as a key challenge, up from 29% in 2025.
“Despite the headwinds of inflation and uncertainty, the dominant story for 2026 will be resilience and action,” Labozzetta said. “Businesses are adapting, modernizing, and expanding, and Provident Bank is committed to serving as a key partner to business owners as they strategize on what is needed to leverage this momentum.”
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 $1 million in annual revenue.
