Small Businesses Remain Steady as Growth Expectations Rebound in Latest Index

Small business confidence remained stable in the second quarter of 2026, according to the U.S. Chamber of Commerce's latest Small Business Index. The Index registered 66.5 in Q2 2026, essentially unchanged from 67.0 last quarter and slightly above the 65.2 recorded a year ago, suggesting that small businesses are holding steady despite ongoing economic challenges.

The survey, which was conducted by Ipsos between May 19 and June 4 and released on July 15, 2026, found that while inflation concerns continue to plague business owners, they’re still feeling positive about their individual business performance. Nearly 70% of small businesses surveyed said their business is in good health, and many are feeling more optimistic about revenue growth and hiring over the next year. However, confidence in local economic conditions has weakened, and owners are cautious about investing as they continue to navigate rising costs.

Here are five key takeaways from the Q2 2026 Small Business Index.

1. Inflation concerns are at their highest level in over a year

Inflation is still the top concern for small business owners. Nearly six in 10 (57%) named it as their biggest challenge in Q2 — up from 53% last quarter and the highest reading in over a year. Higher costs are placing continued pressure on small businesses, and inflation has continued to shape many of their financial decisions in 2026.

2. Revenue and hiring expectations are moving in the right direction

Despite inflation worries, many small business owners are looking ahead with cautious optimism. Two-thirds (66%) expect their revenue to increase over the next year, up from 61% in Q1. Hiring expectations also improved, with 35% planning to add staff (up from 30%). Although hiring plans remain below last year's high-water mark of 42%, the quarter-over-quarter increase indicates that business owners are still seeing opportunities for growth in an uncertain economy.

[Read more: A Guide to Hiring Top Talent for Your Small Business] 

3. Business owners are confident in their companies, but less so in the economy

As in previous quarters, small business owners continue to express far more confidence in their own businesses than in the broader economy. Nearly 70% rate their business as healthy, essentially unchanged from a year ago.

Confidence in local economic conditions, however, has declined noticeably. Just 33% of owners rate their local economy positively, down from 41% a year ago. Views of the national economy are similar, with 30% of survey respondents describing it as being in good shape. This lack of confidence in the overall economy may ultimately impact owners’ business decisions in the quarter ahead.

4. Investment plans remain restrained

While expectations for revenue and hiring have improved, business owners are more cautious about their investment plans for 2026. Just 38% of small business owners expect to increase investment over the next year, down from 47% a year ago.

The reluctance to increase spending suggests that owners are trying to give themselves flexibility and options in the midst of economic uncertainty. Rather than making major capital investments, businesses seem to be opting for a more measured approach as they evaluate future growth opportunities.

5. Cash flow remains stable despite current cost pressures

The majority of small businesses feel relatively secure in their financial position, even with ongoing concerns about inflation and economic conditions. Nearly seven in 10 (69%) report being comfortable with their cash flow, down only slightly from 72% a year ago. While higher operating costs are squeezing margins for many businesses, the Index suggests that many owners have been able to maintain healthy cash flow and continue operating from a position of relative stability.

[Read more: Top 4 Cash Flow Problems in Small Businesses (and How to Fix Them)] 

The bottom line

Although inflation worries continue to intensify and confidence in local economic conditions has weakened, small business owners are still optimistic about the health of their own companies. With revenue expectations and hiring plans rebounding, the Q2 2026 Small Business Index indicates that entrepreneurs are balancing confidence in their businesses with caution about the broader economic landscape.

“The message this quarter is one of measured confidence,” said Tom Sullivan, Senior Vice President of Small Business Policy at the U.S. Chamber of Commerce, in a statement. “Small businesses are still looking ahead, even as they navigate a tougher cost environment.”

To read the full report, click here: Small Business Index Q2 2026.

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