The latest survey of hundreds of employers across Washington state indicates they remain tense in light of increased state taxes, impacts from tariffs and other issues. 

The quarterly survey, conducted by the Association of Washington Business, did show that employers are less concerned that a recession is coming and that tariffs are impacting their business compared to earlier in the year. But they are still under pressure and expect, at best, their businesses to be flat for 2025. 

“Following a legislative session where the Legislature passed the largest tax increase in state history, it’s not surprising to see Washington employers continuing to struggle with the state’s tax climate,” said AWB President Kris Johnson in a statement. “In addition to higher taxes, employers are contending with rising health care costs, rising energy prices and higher costs due to tariffs. This is making a state that was already a high-cost state for business even harder to navigate.” 

More than half of survey respondents listed taxes as the number one challenge they are facing, maintaining its position at the top of the list. It is followed by the cost of health care, government regulation and inflation. Roughly 1 in 3 survey respondents listed tariffs as a challenge. 

Roughly six out of 10 respondents said they are concerned tariffs could negatively impact their business, down from the three out of four respondents in the prior survey. More than half said they experienced direct impact on their business from tariffs, mostly by raising the cost of inputs and disrupting supply chains. Less than half said they raised prices for their customers as a result. 

One in three employers said they expect a recession in the next year, a decline from the prior survey but still significantly above survey responses from a year ago. And more employers are expecting their business to remain flat through the rest of the year. In the prior survey, more had said they expected moderate growth.