Stories of Technology, Innovation, & Entrepreneurship in the Southeast

Although Tennessee business leaders said they are feeling the effects of tariffs, according to a new survey by the Boyd Center for Business and Economic Research at the University of Tennessee, Knoxville, most still believed the chance of a U.S. recession is low and thought Tennessee’s economy had a better outlook than the national economy over the next year.

About a quarter of employers who responded to the Summer 2025 Tennessee Business Leaders Survey, administered in August, said tariffs had affected their business a lot, while 49 percent said they had felt a little effect from tariffs. Forty-four percent said they were passing on some or all of the tariff costs to customers.

In the most recent previous survey, conducted in January, only five percent of respondents thought the chance of recession was over 50 percent. In the August survey, that figure rose to 19 percent. However, over half of business leaders remained optimistic that the chance of recession this year was less than 25 percent.

This optimistic outlook extended to the Tennessee economy but not the nation’s. A total of 44 percent of respondents said the national economy was worse than it was last year, and 43 percent of business leaders expected the U.S. economy to decline over the next year. However, nearly two-thirds of employers believed Tennessee’s economy will outperform the U.S. economy over the next year, attributing the difference to business investments and government leadership in the state.

“Despite talk of tariffs and recession, it’s good to see that these industry leaders have a sunnier outlook for Tennessee,” said Don Bruce, Director of the Boyd Center. “The state’s efforts to create a robust arena for conducting business seem to be paying off.”

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