Small Business Confidence Holds at 66.5 as Inflation Worry Climbs

The U.S. Chamber of Commerce Small Business Index held at 66.5 this quarter, nearly flat with last quarter's 67.0 and slightly above the 65.2 reading from a year earlier, even as inflation worries intensified.

The report, published July 16, 2026, captures a sector split. Small businesses report steady overall health while naming inflation, by far, their top challenge. A majority — 57% — cite inflation as a top concern, up from 48% in Q2 2025.

The pressure is uneven across industries. Businesses in services (66%), retail (59%), and manufacturing (58%) are more likely to flag inflation than those in professional services (46%). Revenue ranks as the second most cited challenge, at 26%, followed by affording employee benefits and healthcare at 20%.

Health Holds, but Optimism Thins

Some 69% of small businesses describe their business as in good health, unchanged from last quarter. The intensity of that optimism has slipped. Only 27% rate their health as very good, down from 32%.

Hiring intentions are ticking up. 35% of respondents say they expect to increase staff, up from 30% last quarter, though still down seven points from 42% in Q2 2025. Revenue expectations are stronger: 66% expect revenue to rise in the next year, up from 61% in Q1 and near levels from one year ago. Comfort with cash flow eased only slightly, at 69% versus 72% a year ago.

Investment plans tell a different story. Just 38% plan to increase investment in the next year — essentially flat from last quarter's 37%, but nearly ten points below the 47% recorded this time last year. Owners are willing to hire and forecast growth, yet they are holding back on capital commitments.

Local Economy Views Slide

Positive views of the national economy remained similar to a year ago at 30%. Sentiment toward local economies deteriorated more sharply: 33% rate their local economy as good today, an eight-point drop from 41% a year ago.

Bryan Owen, Owner & Co-CEO of Between Pixels, a marketing agency in Marietta, Georgia, put the disconnect plainly: "The local economy seems strong in terms of consumer activity, but many of our clients are struggling due to loss of sponsorship revenue, uncertainty, government spending changes, and other factors that are restricting business investment."

The Q2 survey was conducted between May 19 and June 4, 2026.

The gap between resilient revenue expectations and stalled investment plans suggests small businesses are bracing for continued cost pressure. Whether inflation concerns recede from their current 57% peak will likely determine if capital spending recovers in coming quarters.