Rising costs and economic uncertainty are testing the U.S. businesses’ resilient growth. The latest Principal Financial Well-Being Index℠ shows optimism has declined. Confidence dipped slightly to 6.5 out of 10 in October 2025. Moreover, the Index shows that a widening outlook gap exists. This gap is between large businesses and small to mid-sized businesses, or SMBs. SMBs are managing day-to-day pressures from rising costs. Less than half, or 45 percent, of U.S. business decision-makers are optimistic. They are focused on the overall economic outlook now. Optimism is lower for SMBs at 40 percent. This contrasts with 53 percent for the larger employers. SMBs absorb a greater share of rising business expenses.
Prioritizing Technology for Future Business Growth
SMBs are still confident in their own ability to achieve resilient growth. About six in ten expect to grow over the next year easily. This is true despite their less optimistic view of the broader economy. Amy Friedrich, President at Principal, addressed the findings. She said cost increases are influencing growth planning. Businesses are realistic about external challenges. However, they are focusing on what they can control today. They are building strong balance sheets for stability. They are supporting their employees diligently. Furthermore, they are positioning their companies for future business growth. Staffing remains largely stable in the private sector.
Almost half, 47 percent, of businesses increased headcount recently. Two-thirds of all employers expect no staff reductions over the next year. This includes 72 percent of SMBs surveyed. Businesses are increasing their focus on cost control today. Nearly three-quarters of employers report higher expenses recently. This is unchanged since July. Healthcare costs remain the leading concern now. With these heavy cost pressures, many leaders are taking a disciplined approach. Over half plan to upgrade their technology or infrastructure. This is a key step for resilient growth now. They are ready to modernize their systems. They are ready to grow, while planning diligently for uncertainty.
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News Source: Businesswire.com
