Provident Bank's Annual Economic Outlook Survey Shows Business Optimism Amidst Increases in Capital Spending, Hiring and Tech Investment

Core Insights - The 2025 Economic Outlook survey by Provident Bank indicates widespread optimism among 1,000 business owners and leaders regarding the U.S. economy and their own companies [1][4] - Businesses are planning to increase capital spending, invest in technology (particularly AI), and anticipate modest hiring increases [1][6] Economic Optimism - 60% of respondents believe the U.S. economy will be in much better or somewhat better shape in one year [6] - 63% of respondents expect their own business to be in much better or somewhat better shape [6] - 68% anticipate a slight or significant increase in capital spending in 2025 [6] Hiring Trends - Over 50% of respondents expect a slight or significant increase in hiring for 2025, while 36% predict no changes in their hiring plans [6] - 69% of respondents plan to adopt AI tools in their business within the next year, with 29% ready to implement them and 40% interested but seeking more information [6] Challenges Facing Businesses - The top challenges identified by respondents include inflationary pressures (60%), trade tensions and tariffs (51%), and rising consumer and national debt (44%) [6] - For business owners, the primary challenges are employee benefits and costs (46%), inflation including rising costs of energy, fuel, goods, and services (46%), and rising wages (39%) [6] - Despite concerns about inflation, executives report minimal impact from the Federal Reserve's interest rate cuts, with 38% unsure and 30% stating no positive impact [6]