A mid‑year poll of small and midsized businesses across Arizona finds a notable tilt toward growth strategies: seven in 10 respondents say they will favor investments over cost‑cutting measures in the coming year. The survey, which asked business leaders to assess the economy, their 12‑month outlook and where they plan to allocate capital, indicates broad optimism about productivity gains and profitability over the next 12 months even as firms remain cautious about near‑term pressures.
Phoenix skyline: Downtown Phoenix, representing the Arizona business community surveyed in Columbia Bank’s mid‑year poll where 7 in 10 firms say they’ll prioritize investments over cost‑cutting.
Survey respondents delivered a generally favorable assessment of current economic conditions: two‑thirds (66%) rated the economy as excellent or good, and six in 10 (60%) said they expect the economy to improve over the next 12 months — a figure that exceeds the reported national average of 52%. That optimism, however, is tempered by prudence: a slim majority (51%) said they plan to delay major decisions for at least six months to monitor short‑term volatility and cost pressures. Inflation, tariffs and cybersecurity threats remain the top concerns cited by business leaders.
“Over the last year, businesses have shown increasing optimism and most lean toward making investments that will improve their competitive position,” says Shawn Thompson, Southwest Regional Director for Columbia Bank. “That said, companies are still waiting to press firmly on the gas pedal until they determine that recent market volatility and rising costs have stabilized.” The sentiment captures the dual posture reflected in the results: confidence in growth paired with a measured approach to committing capital.
The survey broke out several concrete expectations for the next 12 months. Large shares of firms expect increases in demand (79%), profitability (72%) and revenue (62%), and more than half (54%) anticipate adding employees. Those projections help explain why investment — rather than belt‑tightening — emerged as the dominant priority. Among the specific areas where businesses plan to allocate funds, artificial intelligence ranks at the top: 60% put AI among their top three initiatives for the next year.
Business handshake: An office meeting and handshake illustrating business leaders’ optimism and focus on investments, expansion and hiring highlighted in the mid‑year survey.
The responses suggest AI has moved from strategic concept to operational priority. Nearly all businesses said AI will increase productivity over the next year (97%), and a significant majority expect it to create the need for more skilled roles (87%), raise employee satisfaction and retention (81%), and free staff to concentrate on higher‑value work (51%). Notably, only 4% of respondents said they expect AI to reduce headcount, underscoring that firms see the technology primarily as a tool to augment capabilities rather than a means to cut payroll.
Access to capital remains a crucial component of firms’ plans to expand. Over the past 12 months, more than 40% of businesses reported that cash‑flow constraints limited their ability to grow operations or raise wages — the two most commonly cited chokepoints. Among companies likely to seek financing for expansion in the coming year, 67% said they would pursue a line of credit, 58% would look to a traditional bank loan, and roughly one‑third each indicated they would consider private credit (33%) or equity financing (33%).
Fraud and tariffs figure prominently among areas prompting investment in defenses and operational changes. Three‑quarters of businesses reported experiencing a fraud incident in the last year; among those, two‑thirds said losses exceeded $5,000, nearly half reported losses above $10,000, and about one in five said losses topped $50,000. Rapidly evolving fraud techniques were cited by 46% as the greatest fraud‑related challenge. While many firms have implemented common countermeasures — regular audits (66%), employee training programs (58%) and upgraded payment and authentication technologies (48%) — plans for the year ahead emphasize using bank fraud solutions (47%), strengthening vendor verification processes (45%) and partnering with cybersecurity experts (43%).
Tariffs have had a more pronounced effect on Arizona companies than the national average, the survey found. Seven in 10 local firms said they paid a tariff over the last 12 months, compared with a national average cited at 57%. In response to higher costs, firms reported a mix of tactics: 43% raised prices, 29% increased inventory levels or accelerated purchases, and 27% postponed or canceled planned investments. A large majority — 73% — said they will seek a refund, and more than 30% believe the impact of tariffs will persist for at least three years.
Taken together, the findings depict a business community that anticipates growth and is positioning to capture opportunity via technology, hiring and targeted investments, while also preparing defenses against external risks. Many leaders remain in a wait‑and‑see posture for major decisions, seeking clearer signals that market volatility and rising costs have stabilized before committing to more aggressive expansion. The survey’s detailed results and related materials on business plans and priorities are available from the organization that conducted the poll.
Arizona businesses also appear more acquisitive than the national average, with 52% likely to pursue acquisitions compared to 36% of U.S. peers and 61% planning real estate expansion to fuel growth, per Columbia Bank's full 2026 Business Barometer breakdown. These priorities underscore their relatively bullish stance even amid caution on timing. (Columbia Bank / InBusiness Phoenix)
The 2026 Business Barometer surveyed 1,186 owners, executives and financial decision‑makers nationwide and was fielded April 28–May 7, 2026; the study was conducted in partnership with DHM Research, targeted companies with roughly $500,000 to $500 million in annual revenue, and reports a margin of error of about 2.7%.
Columbia Bank published the full 2026 Business Barometer on June 25, 2026 and makes the downloadable report available through its corporate materials for those seeking the complete national and regional breakdowns.
Columbia Bank is the principal subsidiary of Columbia Banking System, Inc., which trades publicly on Nasdaq under the ticker COLB.