PNC’s latest survey of small and mid-sized business owners indicates sustained optimism about their businesses and the economy. Seventy-eight percent of business owners are optimistic about their own business prospects, near the survey’s all-time high. Half of respondents are optimistic about the national economy, slightly below last fall’s 56%, while 56% feel positive about their local economy, down from 62% six months ago.

Higher revenue businesses are more likely to express optimism and expect increased sales and profits. Demand from consumers and businesses continues to drive revenue growth, with the economy projected to expand into 2026. Manufacturing and construction businesses are among the most likely to anticipate sales increases, while service sector businesses are the least likely.

Inflation remains a major concern, with 43% of respondents extremely worried, more than double the level from last spring. Fifty-three percent plan to raise prices in the next six months, down from 61% last fall. Hiring expectations remain low, with only 15% planning to add full-time employees, compared to 21% a year ago. Inventory growth expectations are at a survey high of 42%, while 26% anticipate lower cash reserves next year, a sharp increase from 7% a year ago.