Spring has sprung but many employers in Washington state see an economic winter quickly approaching. 

Of the 444 respondents to the Association of Washington Business’ quarterly survey of employers, 44% say they expect the state to enter a recession in the next year. That’s up from 17% in the prior survey. 

They cite perennial concerns over taxation and regulation as among the biggest concerns. Three-quarters of respondents also anticipate that tariffs will have a negative impact on their business and have already raised the cost of business inputs. Nearly half, or 45%, say the tariffs have caused supply chain disruptions.  

The dismal mood is causing business leaders to consider a variety of adaptations, from delaying planned capital expenditures (35%) and absorbing higher costs (32%), to implementing a hiring freeze (19%) and reducing or eliminating planned salary increases (12%). A smaller number are making plans to lay off staff (10%), and 5% have already implemented layoffs. 

Despite the challenges facing them, most employers rated the current Washington economy as moderate or strong, with about a quarter saying it’s weak or very weak, roughly the same description as a year ago.

Similarly, most survey respondents said their business is flat (42%) or growing (24%) with fewer saying it’s beginning to experience a downturn (23%) or struggling (11%), also similar to responses in the April 2024 survey.

The full report can be found here.