Alaska SBDC’s 8th Annual Small Business Survey Highlights Sharp Shift in Small Business Confidence, Workforce Plans, and Financial Outlook in 2025
First-ever ‘Quick Pulse’ survey captures most dramatic economic shift in 8-year history
Anchorage, AK, May 8, 2025 — The Alaska Small Business Development Center (SBDC) at the University of Alaska Anchorage today released its 8th Annual Small Business Survey, alongside its first-ever Quick Pulse supplement, revealing a dramatic reversal in confidence, hiring, and financial outlook among Alaska’s small business owners in the first months of 2025.
Together, the surveys reflect the voices of nearly 960 small businesses across 92 communities, covering 75% of Alaska’s industries. The primary survey, conducted in late 2024, captured a snapshot of a growth-minded business community. But by April 2025, responses from a re-engaged group of 273 businesses (29% of the original sample) told a very different story.
“In just four months, there’s been a significant shift in both the economic conditions Alaska businesses face and how they view their future,” said Jon Bittner, State Director of the Alaska SBDC. “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.”
At the close of 2024, Alaska businesses were focused on hiring, customer growth, and managing high costs. By spring 2025, however, their top concerns had shifted sharply to inflation, rising costs of goods, and, for the first time in survey history, political uncertainty.
“This is the first time political uncertainty has cracked the top three challenges,” said 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.”
Unlike the early pandemic-era turbulence of 2020, which was driven by health and operational disruptions, today’s uncertainty stems from policy shifts, trade disruptions, and rising costs.
Economic Outlook Reversal
The most striking finding reveals a stark reversal in business optimism. While 60% of respondents expected good or very good financial conditions in the year ahead when surveyed in late 2024, this figure dropped to just 46% by April 2025.
Similarly, expectations for Alaska’s state economy showed an unprecedented swing, representing the highest level of economic pessimism recorded in the survey’s eight-year history.
- Businesses expecting improvement: declined from 46% to 26%
- Businesses expecting decline: increased from 25% to 63%
Hiring plans reflect the same trend:
- Businesses planning to hire: declined from 33% to 27%
- Maintaining current staff: increased from 63% to 66%
- Planning reductions: increased from 4% to 6%
Tariffs and Cost Pressures Take a Toll
The Quick Pulse survey also measured the direct impact of recent tariffs on Alaska’s uniquely vulnerable business ecosystem:
- 61% of businesses report supplier price increases due to tariffs
- 48% have implemented their own price increases in response
- 35% are attempting to absorb higher costs without raising prices
These pressures are particularly acute in Alaska, where geographic isolation and import reliance amplify cost fluctuations. For the first time in the survey’s history, political uncertainty has emerged as a top-three challenge facing Alaska businesses, joining inflation and rising operating costs at the forefront of concerns.
Capital Needs Growing
In late 2024, only 21% of respondents said they planned to seek capital, with many citing caution or barriers. By April 2025, that number had jumped to 36%, as more businesses look to financing not for expansion, but to weather inflation, cover operating expenses, and invest in efficiency technology.
- 36% plan to seek funding in 2025, up from 32% in late 2024
- Traditional bank loans remain the most sought-after funding source at 27%
“Small businesses are being squeezed from all sides: rising costs, shrinking margins, and fewer qualified applicants in a declining workforce-age population,” Bittner added. “That’s why workforce support, capital access, and policy clarity need to be front and center for anyone working on economic development in Alaska.”
Looking Forward
Despite mounting challenges, Alaska’s entrepreneurs continue to demonstrate resilience, adaptability, and grit. The Alaska SBDC remains committed to helping them navigate this uncertain landscape through no-cost advising, practical education, and direct connections to capital and resources.
“Alaska businesses have weathered everything from natural disasters to economic ones and are uniquely prepared to navigate economic turbulence, but they shouldn’t have to do it alone,” said Bittner. “With the right support and smart policy, they’ll not only survive this latest economic storm, they’ll lead the way forward.”
The full report includes visualization of the four-month impact on Alaska’s businesses and is available at https://aksbdc.org/about/annual-reports/.