Lee EBCS: Second Quarter 2026 Report
May 04, 2026 / RERI Research Team
Lee County Executive Business Climate Survey Second Quarter 2026 Report
The national economy entered 2026 on mixed footing, with steady economic growth offset by a softening labor market, above-target inflation, and geopolitical headwinds keeping consumers, business owners and policymakers cautious. Real Gross Domestic Product (GDP), an overall measure of economic activity, grew at an annualized rate of 2.0 percent in the first quarter of 2026, characterized by increases in consumer spending, investment and government spending. The national unemployment rate inched up 0.1 percentage points from March 2025 to 4.3 percent in March 2026, even as total unemployment rose 1.5 percent and employment slipped 0.4 percent, signaling a cool labor market marked with slower hiring and reduced worker turnover. Inflation, as measured by the Consumer Price Index, rose by 0.9 percentage points to 3.3 percent in March, likely reflecting early effects of geopolitical tensions, though core inflation has not yet absorbed these pressures. Together, this led the Federal Open Market Committee (FOMC) to maintain its wait-and-see approach, holding the federal funds rate at 3.50 to 3.75 percent for the third consecutive meeting in April 2026.
National consumer sentiment softened, falling 3.1 points from January to March, as elevated prices and persistent uncertainty continued to weigh on households. Small business confidence also declined, with the NFIB Small Business Optimism Index falling below its historical average. The NFIB’s Uncertainty Index rose to its highest reading since May 2025, suggesting more “wait-and-see” behavior than last quarter. This reinforces a K-shaped pattern, where higher-income households and larger firms remain relatively more resilient while lower-income consumers and small businesses face mounting pressure. In Chair Powell's April 29, 2026 press conference, he pointed to how ongoing disruptions to global energy markets stemming from the conflict in the Middle East are creating uneven inflation pressures across sectors. Rising oil prices and the ongoing closure of the Strait of Hormuz are posing a significant risk factor for the economic outlook that the Fed acknowledged carries a high level of uncertainty heading into the rest of 2026.
The latest Lee County Executive Business Climate Survey results aligned with broader NFIB findings. The Executive Business Climate Index fell 4.0 points from the previous quarter to 50.4 in 2026 Q2, driven by declines in current economic conditions (down 4.1 points), future economic conditions (down 3.9 points) and future industry conditions (down 4.1 points). Both current and future hiring trends also slowed in the latest reading (down 2.7 and 1.1 points), consistent with the broader labor market cooling observed across the region.
Downloads:
Lee County Executive Business Climate Survey Second Quarter 2026 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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