N. Va. business leaders grow more pessimistic about near-term future of local economy

A quarterly survey of Northern Virginia business leaders shows an increasing level of concern about the near-term future of the region’s economy.

Just under half the 120 business leaders surveyed — 49% — foresee the economy declining either “slowly” or “significantly” over the next six months, according to results released yesterday (Thursday) by the Northern Virginia Chamber of Commerce and Pinkston for the fourth quarter of 2025.

In comparison, 34% of respondents to a similar survey released in July for the third quarter expected a downturn.

The fourth-quarter results showed the percentage of respondents expecting improving Northern Virginia economic conditions in the coming sixth months dropping from 40% to 26%. The percentage of those believing economic conditions would stay the same was essentially flat at 26%.

Of the 26% who believe the regional economy will expand, 2% project significant growth, and 24% say the growth will be slow. Of those predicting economic declines, 37% believe it would drop slowly, but 12% anticipate a significant decline.

As in past iterations of the survey, respondents generally expressed more optimism about their own companies’ outlook over the next six months than that of the regional and national economy, Pinkston Senior Vice President D.J. Jordan noted.

“In July, Northern Virginia business leaders were hopeful that the end of [Department of Government Efficiency cuts] and a favorable tax and regulatory environment would benefit their bottom lines,” Jordan said in a press release. “However, the government shutdown, ongoing tariff negotiations, and stubborn inflation are causing businesses to become more pessimistic and pause investments.”

The survey sampled business leaders connected to the Northern Virginia Chamber as well as chambers of commerce in Alexandria, Arlington, Falls Church, Loudoun, Greater Reston, Prince William, Central Fairfax, Mount Vernon, Springfield and Dulles.

Northern Virginia Chamber Julie Coons told FFXnow the survey results were not unexpected, given the upheaval going on at the federal level.

“Our 2025 Business Leader Surveys have demonstrated that federal policy decisions, such as the government shutdown, tariff policies and restructuring of the federal government, have a tremendous impact on the Northern Virginia business community,” Coons said. “And as goes Northern Virginia, so goes the [D.C.] region.”

Quarterly results have bobbed up and down throughout 2025, but the overall trend in sentiment throughout the year has been downward, echoing increasingly somber predictions from various researchers of an economic slowdown in Virginia due in part to federal job losses.

Seeking to blunt the impact on a local economy long dependent on federal government jobs and spending, the Northern Virginia Chamber of Commerce released a roadmap for the region in July proposing a pivot to artificial intelligence and other industries believed to have the potential for growth.

“While the increase in pessimism from Q1 to Q4 is a cause for concern, the Northern Virginia Chamber is actively executing a proactive strategy to change course,” she said.

In the fourth-quarter survey, 25% of respondents said they anticipate hiring more workers in the coming six months, 53% expect no major change, 16% envision cuts and 6% are unsure.

Compared to a year before, 20% of respondents said they were having more difficulty finding qualified staff to hire, while an equal number said finding staff has become less difficult. The remaining 60% reported no significant change.

A total of 44% of respondents reported their business being negatively impacted by the federal government shutdown that began Oct. 1, while 13% had seen growth because of it. The remainder reported no change.

Asked how President Donald Trump’s tariff polices are affecting their businesses, 13% said they’re contributing to slow growth, but 37% reported declines, including 7% saying they’ve experienced major declines. Half of respondents said the tariffs are having no impact.

With Virginia’s statewide elections coming up next month, responding business leaders listed transportation and affordable housing as their top two policy priorities for the incoming governor. Affordable housing also led the way when it came to desired improvements from local governments, followed by lower taxes, improved infrastructure and expedited permitting.

Of the 120 business leaders responding to the survey, 55% worked at firms with fewer than 50 employees, 13% at firms with more than 1,000 and the remainder in between.

One third of responding companies were located in Fairfax County. Arlington was second-most represented at 20%, and Prince William and Loudoun counties followed at 16% and 15%, respectively.