Rising Confidence Fuels Hiring and Development [WSJ/Vistage Feb 2026]

Momentum is building for small businesses in the second month of the year. Confidence increased as a greater proportion of small businesses report expectations for increased revenues in the year ahead. The WSJ/Vistage Small Business CEO Confidence Index increased more than 3 points to reach 97.3 in February, up from 94.1 in January. With last year’s post-election optimism now firmly in the rearview mirror, this level of small business confidence is 11.3 points over the 12-month average.

One of the key drivers of this month-over-month improvement is the current state of the economy. The proportion of small business leaders who believe the economy is worse than a year ago has steadily increased over the past 4 months, dropping from 34% in January to 30% in December. Meanwhile, 27% of small business leaders report the economy has improved, up from 24% last month and the highest since last February.

Growth Prospects Strongest in a Year

Another driver of small-business confidence is strong expectations for growth over the next 12 months. Small businesses have adapted to policy uncertainty, as have their customers. Growth is slowly accelerating, as expectations for both revenue and profitability among small businesses have reached their highest levels in a year.

Over 7 in 10 (71%) anticipate revenue growth in the year ahead, up from 67% in January.

Additionally, 6 in 10 (60%) expect improved profitability, up from 56% last month.

These indicators have strengthened consistently since last spring, suggesting demand is building faster than uncertainty.

Workforce Growth Increases as Businesses Mitigate Immigration Impacts

Typically, when revenue expectations increase, hiring plans follow suit to accommodate increased demand. Fifty-five percent of small businesses plan to add staff in the next 12 months, up from 50% in January. However, 9% of small businesses plan to reduce headcount, indicating some caution amid overall growth optimism.

Immigration enforcement is hitting certain industries with direct operational and financial impacts. “Our labor rates are increasing without a more immigrant workforce,” says Chris Lamphear, CEO of LL Custom Contracting, Inc. in Madison Heights, Michigan.

Ronnie Kahan, president of Apollo Painting and Wallcovering in Inglewood, California, describes the operational challenge: “This is a big problem for my trade. Many workers are afraid to work on large projects.”

For other industries, recent immigration enforcement has created emotional challenges rather than widespread operational disruptions. “It’s emotionally scarring our legal and documented coworkers, causing unneeded anxiety for their families, and destroying the trust that used to be felt between documented immigrants and the communities in which they live,” says Burt DeMarche, president of Laurelrock Company in Wilton, Connecticut. Indirect impacts on small businesses may include lower productivity, quality of work, or absenteeism.

Leadership Development Remains a Key Investment

As demand increases, small business leaders focus on how they can harness their talent to meet increased demand. To that end, 68% of small businesses offer leadership training programs for their leaders, which are not only investments in those employees, but investments in the people they lead. Managers and leaders are critical to workforce satisfaction, engagement, and culture.

Industry knowledge is also critical to maintaining a competitive advantage, as evidenced by the 63% of small businesses that provide industry-specific certification. Just 11% of small businesses offer no development programs for managers and leaders.

In a tight labor market, developing leaders serves as both a retention tool and a growth strategy. CEOs should consider investments in managers and leaders not only to ensure productivity and accountability but also to improve engagement and morale across their workgroups and teams.

Regulatory Changes Show Mixed Impacts Among Small Businesses

Post-election, small businesses were optimistic that policy and regulatory changes would have positive impacts. Over the past year, the negatives seem to outweigh the positives: 30% report negative impacts, 18% report positive impacts, and 12% report both positive and negative. The range of sentiment varies by industry; in some cases, increased regulation creates more stringent standards for products and services, while in others, regulatory changes open new opportunities.

Tariff policy continues to dominate concerns, with the unpredictability creating more issues than the costs themselves. “Constant changes to tariffs and regulations have made forecasting sales and profitability impossible,” says Andy Manning, CEO of Manning Lighting, Inc., in Sheboygan, Wisconsin. Volatility has frozen capital decisions and slowed growth across some industries, with some manufacturers reporting significant volume declines over the past year.

Regulatory relief shows promise in specific sectors. As Shannon Oelkers, owner of Integrity Environmental, LLC in Eagle River, Alaska, reports, “We provide environmental permitting compliance for industrial facilities, and recent federal scrutiny of the EPA regulations has driven a surge in business as business owners want to take advantage of the ‘looser’ regulatory environment. This is mostly perception-driven growth because the existing environmental regulations in our industry are not changing significantly.”

Christine Hopkins, president and CEO of ASCI Federal Services LLC, in Anchorage, Alaska, notes, “Removing the affirmative action requirements allowed us to be more flexible and competitive by freeing up both employee time and cash (cost of compliance).”

In some cases, increased regulation creates more stringent standards for products and services. “I am in the security and fire industry. Regulation generally means the requirements of what we sell are increased,” says Morgan Pace, president of Ursa Security and Control in Plantsville, Connecticut.

Tax Relief: Targeted Benefits, Modest Expectations

As tax season approaches, small businesses are seeing positive impacts, with nearly half (49%) reporting some form of relief. While a third of small businesses expect no relief, 18% remain unsure of the impacts at this time.

Specific provisions that help small businesses include:

• 100% depreciation on new equipment purchases
• R&D expensing
• Cost segregation rules
• Tax rates for LLCs and S Corps

While tax relief helps, the reality check is consistent across industries. “Any savings and taxes are being offset by increased cost of labor and employee benefits,” says Gary Rivera, CEO of Creative Design Group in Rancho Palos Verdes, California. For most small businesses, tax benefits provide modest help rather than transformational relief.

Monica Lewis, president of J.S. Brown & Co in Columbus, Ohio, adds, “In the residential design-build remodeling industry, tax policy is only one piece of our economic picture. While certain changes may offer theoretical relief, our day-to-day reality here on the jobsite is shaped more by tariff-driven material volatility, workforce shortages, and reduced consumer confidence around large discretionary investments. Until stability returns to the broader market, those factors continue to outweigh any tax-related benefits for our business.”

February Highlights

The February 2026 WSJ/Vistage Small Business CEO Confidence Index was calculated from an online survey sent to CEOs and other key leaders who are active U.S. Vistage members. The survey, conducted between February 2-9, 2026, collected data from 370 respondents with annual revenues ranging from $1 million to $20 million. The Index is calculated based on favorable minus unfavorable responses from this set of standard questions, plus 100, anchored to June 2012 = 100.

• Current Economy: Sentiment about the U.S. economy compared to a year ago continues to improve; the proportion of small business leaders who believe it is worse than a year ago has dropped from 34% to 30%. Conversely, optimism improved with 2% of small business leaders reporting improvements, up from 24% last month.
• Future Economy: Forward-looking sentiment among small business leaders continues to improve as over one-third (36%) believe the economy will improve, while 21% believe it will worsen in the next 12 months.
• Revenue Projections: More than two-thirds (71%) of small business leaders anticipate revenue growth in the year ahead, up from 67% in January, while 8% expect declining revenues.
• Profitability Projections: The proportion of small business leaders who expect increased profitability rises to 60%, up from 56% in January, while those who expect a decline drop to 15%.
• Fixed Investment Plans: Plans for fixed investments improved slightly in February, with just over one-third (34%) planning to increase fixed investments in the next 12 months, while 14% expect to scale back.
• Workforce Expansion Plans: Workforce expansion plans jump 5 points, with 55% of small business leaders indicating they plan to add staff in the next 12 months, up from 50% in January. However, 9% plan to reduce headcount, up from 7% in January.

To explore the full February 2026 WSJ/Vistage Small Business data set, visit our data center or download the infographic.

The March 2026 WSJ/Vistage Small Business CEO Confidence Index will be calculated from responses to a CEO survey, conducted from March 2-16, 2026, gathering input from CEOs and other key leaders who are active members of Vistage.