Lee EBCS: Second Quarter 2025 Report
May 02, 2025 / RERI Research Team
Lee County Executive Business Climate Survey Second Quarter 2025 Report
Hard data available at the national level would suggest that the economy remains resilient despite some evidence of slowing growth. The labor market did not waver, with the national unemployment rate measuring at 4.2 percent in March, staying within the range often considered “full employment” by economists. Inflation, as measured by the Consumer Price Index (CPI), reported at 2.4 percent in March 2025, coming in below economist forecasts. Advanced estimates for real Gross Domestic Product (GDP), a measure of domestic economic activity in our economy, decreased at a 0.3 percent annualized rate for the first quarter, it’s first decline since the first quarter of 2022.
However, soft data collected from surveys suggest that people and businesses aren’t feeling good about the economy. Consumer sentiment fell nationally, declining 19.5 points from January to March 2025. Consumers viewed risks from multiple facets of the economy, attributed largely to uncertainty surrounding recent trade developments and potential rising inflation in the months ahead. Optimism amongst small businesses also waned in the first quarter, falling 5.4 points from January to March 2025. Similar to consumers, concerns surrounding inflation remain at the top of business owners minds.
The Federal Open Market Committee (FOMC), which has a dual mandate of stable prices and maximizing employment, met twice during the first quarter of 2025, opting to hold rates at its current rate at 4.25 – 4.5 percent. Projection materials from the FOMC’s March meeting continue to suggest the committee might reign in rate cuts in 2025, showing two projected rate cuts throughout the rest of the year. This cautious approach reflects growing uncertainty surrounding policy from the administration, which could potentially impact both employment and inflation.
Locally, sentiment amongst Lee County business executives, as measured by the Executive Business Climate Index (EBCI), slipped 2.5 points from the previous quarter to 52.1. The decline in the EBCI was driven by a fall in both the Current Economic Conditions (down 6.2 points) and the Future Economic Conditions (down 3.9 points) components. Current Hiring Trends (down 5.7 points) and Future Hiring Trends (down 1.9 points) both continue to suggest a slowdown in hiring for the county, supported by the rising local unemployment rate (up 0.6 percentage points from March 2024 to March 2025). Likewise, Future Investment Trends fell 6.9 points, suggesting a slowdown in economic growth in the area. Taxable sales, a proxy for economic growth in the area, have slowly declined since 2024.
The survey also asked questions related to business owner expectations surrounding trade and immigration policy. Our survey itself ran during a period in which reciprocal tariffs were both announced (April 2) and delayed (April 9), exemplifying the uncertain landscape that business owners face. Regarding tariff impacts, 46 percent of responding business owners were concerned about the potential impact that tariff policies would have on their business, while 39 percent were not concerned at all. When asked about how they felt about how tariffs would impact the Southwest Florida economy, 50 percent expressed concern while 30 percent were not concerned. Immigration garnered less concern overall for business owners, with only 23 percent of responding owners expressing concern about how immigration policies would impact their business. However, 41 percent expressed concern about how immigration policies would impact the regional economy. Respondent comments underscored the divide observed in this survey, with many noting both apprehension and optimism about policy outcomes.
Downloads:
Lee County Executive Business Climate Survey Second Quarter 2025 Report
Previous Lee County Executive Business Climate Survey Reports
Acknowledgments:
We would like to thank all of the executives that participated in our survey. Without your continued feedback each quarter, our surveys would not be possible. Furthermore, we would also like to thank our partners, the Horizon Council and Lee County Economic Development, for helping make the survey happen.
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