Employers across the state are less in the doldrums about what 2025 could have in store for the economy, but rising costs and looming tariffs still have them on edge. 

In a quarterly survey by the Association of Washington Business, 17% of the 441 respondents said they expect a recession in Washington in the next year, down from 25% who said that a year ago, according to a release.  

About half of the respondents expressed optimism that their businesses would see growth in the next six months. 

That improved outlook was tempered by concerns about government regulation, tax burden, inflation, the cost of health care and lack of qualified workers. More than a third of respondents said their business costs had gone up 21-30% since January 2021. More than three-quarters also said their business had experienced rising energy costs in the past two years. 

In a new survey question, respondents who identified as manufacturers or agricultural producers were asked about tariffs. More than half said they were concerned that potential tariffs or retaliatory tariffs would negatively impact their business. 

The association reported that 68% percent of respondents to the survey have 50 or fewer employees. Roughly one third are manufacturers, 12% are construction, and 11% are services, IT or professional. Other categories of employers who responded include retail, wholesale, finance, agriculture and forestry, health care and restaurants.