Survey: Small Biz Owners Say a Recession Is Near

A new report from Alignable, the largest network in North America for small business owners, reveals that 60% of U.S. small business owners believe a recession is on the horizon — and in Canada, that number climbs to 70%. This growing concern stems from the rising impact of tariffs, inflation fears, and overall economic instability.

The report is based on the sentiments of 8,083 small business owners who responded to an Alignable poll conducted from 3/13/25 to 4/24/25.

The results point to a surge in anxiety spreading across industries and regions, highlighting just how deeply recession fears have taken root within the small business community.

Business owners also report challenges that are already affecting their bottom lines:

• 73% say they’re earning less now than they were a year ago — a five-point increase from last month.
• 59% say current and expected tariffs have made them less optimistic about 2025 — up nine points.
• 29% say inflation is their top concern, and 60% expect the current U.S. administration’s policies to further accelerate it.

These trends build on Alignable’s research earlier this month, as well, which showed that 44% of small businesses expect tariffs to directly reduce their sales.

“The fact that 60% of business owners now expect a recession shows just how deeply uncertainty around tariffs is taking hold,” said Eric Groves, Alignable’s Co-Founder and CEO. “In times like these, business owners need greater access to resources. That’s why it’s critical for business owners to understand and unlock the resources contained in their networks. Alignable’s Second Circle networking helps entrepreneurs see and act upon the value within their networks — saving time, building faster trust, and reaching customers who are more likely to need and value what they offer. Strategic planning, smart connections, and community support can make all the difference in staying resilient and growing, even in a turbulent economy.”

Business owners in the following sectors expressed especially high levels of concern: arts and music: 73%, nonprofits: 71%, and education: 70%

And the majority of SMB owners in these sectors also believe a recession is coming soon:

Gyms/Fitness: 68%
Restaurants: 67%
Travel/Lodging: 67%
Beauty: 66%
Marketing/Advertising: 66%
Retail: 66%
Science/Technology: 65%
Legal: 64%
Health/Wellness: 63%
Manufacturing: 58%
Transportation: 57%
Automotive: 55%, and 
Construction: 51%.

By contrast, concern was slightly lower for business owners in:

Finance: 49%, and
Real Estate: 49%.

And entrepreneurs in these two industries bucked the trend entirely, with more of them predicting that a recession is not coming than those who believe it is:

Insurance: 47% said no; and 44% said yes.
Plumbing/HVAC: 48% said no; and 46% said yes.

Where Fears Run Deepest
Recession concerns vary significantly by state and province. States where more than 70% of small business owners polled believe a recession is imminent include: Oregon: 76%, Maine: 73%, and Maryland: 71%.

States that are not far behind include:

Massachusetts: 66%
Minnesota: 65%
New York & New Jersey: 64%
California & Pennsylvania: 63%
Illinois: 61%, and
North Carolina, as well as Washington State: 59%.

States with the lowest levels of concern are:

Florida, Indiana, and Arizona: 50%
Alabama and Kentucky: 49%
Louisiana and South Carolina: 46%, as well as
Oklahoma: 43%.
 

Canadian Business Owners Are Even More Concerned

North of the border, recession fears are even more pronounced. As we mentioned above, 70% of Canadian small business owners expect a downturn — with the following provincial breakdown:

Quebec (QC): 78%
Ontario (ON): 72%, and 
Alberta (AB): 64%.

Voices from the Front Lines

Hundreds of small business owners offered candid perspectives on the economy by adding their comments to several parts of this survey. Statistics are helpful for the broad trends, but these quotes really convey the emotional side of this story.

“Confusion and fear are bad for business. We need stability, not constant policy shifts.”
“We’re already in a recession. I’m working two jobs beyond running my business just to stay afloat — there’s not enough business occurring in any of them.”
“My business is crashing. No one wants to spend money.”
“Lots of people can no longer afford to buy a home. That’s not good for realtors.”
“Everyone will be significantly more pessimistic when the tariffs make it hard to keep our great employees employed.”
“It all depends on what ultimately happens with tariffs and commodities. That will set the tone.”
“Better to be prepared in case a recession doesn’t happen than to be unprepared if it does.”
“Even if a recession occurs, I will do everything in my power to keep my business moving forward.”
“I believe it’s very possible we’ll fall into a recession. But I’m not worried about it. I’ve been through tough times before.”
“Oh, we were in a recession before the current administration even took office.”