Survey Shows Dramatic Drop in Alaska Small Business Confidence and Financial Outlook
Photo Credit: wichayada69 | Envato
The Alaska Small Business Development Center (SBDC) says its 8th Annual Small Business Survey reveals a sharp reversal in small business confidence, economic outlook, and financial outlook in the first months of 2025, especially compared to the “heartening shift toward optimism” in last year’s survey.
When the survey began in late 2024, SBDC says the snapshot of nearly 960 businesses reflected a growth mindset. However, when the survey re-engaged with 273 respondents by April 2025, the results told a different story.
Sharp Economic Shift
“In just four months, there’s been a significant shift in both the economic conditions Alaska businesses face and how they view their future,” says Alaska SBDC Executive Director Jon Bittner. “We knew that releasing last year’s data alone would not reflect the reality that Alaska’s entrepreneurs are facing right now, so we went back to get real-time insight into how they’re being affected with our 2025 Quick Pulse survey.”
Current Issue
June 2025
Among the key findings are a drop in business optimism. In late 2024, 60 percent of businesses expected good or very good financial conditions in the coming year. By April 2025, only 46 percent remained optimistic.
Expectations for Alaska’s statewide economy showed an unprecedented swing, representing the highest level of economic pessimism ever recorded in the survey’s eight-year history. Businesses expecting decline increased from 25 percent to 63 percent, and those expecting improvement declined from 46 percent to 26 percent.
The 2025 Quick Pulse survey also measured the direct impact of recent tariffs on international trade: 61 percent of businesses report supplier price increases due to tariffs, 48 percent have implemented their own price increases in response, and 35 percent are attempting to absorb higher costs without raising prices.
For the first time in the survey’s history, political uncertainty emerged as a top concern facing Alaska businesses, joining inflation and rising operating costs at the forefront of concerns.
“This is the first time political uncertainty has cracked the top three challenges,” says Bittner. “Even during COVID, it didn’t come close. This shows businesses aren’t just responding to market conditions—they’re reacting to a broader sense of instability.”
Some survey respondents used an open-ended question option to voice concern about last fall’s voter-approved measure to raise Alaska’s minimum wage and mandate paid sick leave. SBDC says those 13 percent who raised this issue cited increased labor costs, reduced flexibility, and lack of implementation support. “These unprompted responses reflect a meaningful level of apprehension among small business owners regarding the recent regulatory changes. Many described the shifts as disruptive and burdensome, particularly for seasonal businesses, operations in rural Alaska, and employers with lean staffing models,” the report says.
The full report, including the 2024 survey and the Quick Pulse, is available online.
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