Writer: Mirella Franzese
July 2025 — Sentiment among business leaders in Northern metro areas remained mixed in the second quarter of 2025 as high expectations for corporate performance and hiring were overshadowed by growing anxieties over economic resilience and government support, according to caa’s latest business sentiment survey.
Confidence in the Northern economy tumbled 11% from the first quarter with just 58% of survey respondents rating current market conditions as “strong.” Respondents to the Invest: Business Sentiment Survey (I:BSS) were asked to rank various economic factors from 1 to 5, with 5 being the strongest.
“Broader economic uncertainty has led to a wait-and-see approach that has tempered demand to some extent,” said the CEO of a New Jersey real estate management company.
The percentage of strong ratings for Northern markets like Philadelphia and New Jersey also remained notably below the national average of 75%. Average economic sentiment in Northern markets likewise fell by 0.23 points from the first quarter, hitting a score 3.61/5 in 2Q25 — also below the national benchmark of 3.94 and the market high-score of 4.15 reported in Southern metro areas, including Atlanta, Houston, and Miami.
Sentiment around corporate performance largely skewed positive despite ongoing market challenges, with 90% of decision-makers reporting strong performance in the past six months. Nonetheless, the share of Northern respondents who rated their company’s performance as strong slipped by 2% quarter over quarter, potentially reflecting broader market uncertainty over issues like tariffs, tighter immigration restrictions, and geopolitical tensions, and their expected impact across the North’s logistics-based industries.
“Recent immigration policies have had a significant impact on (Hispanic entrepreneurs and startups). Many Hispanic business owners have reported a 10% to 15% drop in revenue due to decreased consumer spending and workforce uncertainties,” explained the executive of Newark-based business corporation.
“Newark has felt the effects of tariff discussions, with fewer containers and ships arriving. This slowdown has hurt local transportation and logistics businesses, and we expect these challenges to persist for at least the next six to nine months,” added the decision-maker.
These macroeconomic headwinds did not affect corporate hiring plans in the North, however, underscoring the resilience of the Northern region’s labor market. In fact, 73% of Northern decision-makers said that they planned to increase staffing in the next six months, marking a 12% rise from the previous quarter (61% in 1Q25). Northern market leaders also presented a strong outlook for hiring overall.
Demand for corporate products and services similarly remained strong among Northern businesses. The share of respondents rating demand as strong rose from 88% to 94% this quarter, which could be a reflection of the previous quarter’s strong economic performance, combined with a delay in assessing the real-life impact of tariffs, which remains to be seen.
“So far, we haven’t seen a drop-off in our business. … Our earned revenues are as high as they’ve ever been. People are buying later now than before, making decisions closer to the date. I think this stems from a quiet anxiety, likely due to fluctuations in tariffs, markets, and related factors, causing people to watch their dollars more closely. However, this has not yet resulted in a diminution of our business,” said a New Jersey arts executive.
Although anxieties over regional government support grew in this quarter as the predominantly Democratic North faced widespread confusion over the new administration’s economic policies. “The situation is uniquely volatile under the current administration, but it is not unusual to have some uncertainty,” said a Philadelphia-based energy leader. “The tariffs are a challenge across all industries. Equipment gets expensive and lead times become longer, so executing projects and pricing products can be difficult with the uncertainty in the marketplace. To know how to make a project plan that can stick and how to price that appropriately is a challenge”.
In Northern markets, the share of respondents expressing positive local government support fell by 10% quarter over quarter, but increased by 6% year over year. On a broader level, however, this rating suggests that business leaders see local government support as lacking, highlighting the need for strong public-private alignment.
For more I:BSS reports, click here.
