Lee EBCS: Third Quarter 2026 Report
August 03, 2026 / RERI Research Team
Lee County Executive Business Climate Survey Third Quarter 2026 Report
The national economy remained on uneven footing in the second quarter of 2026, marked by decelerating growth, a softening labor market and elevated inflation. Real Gross Domestic Product (GDP), an overall measure of economic activity, grew at an annualized rate of 1.5 percent in the second quarter of 2026, slowing from the first quarter’s pace, with consumer spending accelerating even as investment growth cooled and government spending declined. The nation’s labor market softened further in the second quarter. The seasonally adjusted unemployment rate inched up 0.1 percentage points to 4.2 percent from June 2025 to June 2026. The labor force participation rate fell to 61.5 percent in June, its lowest reading since March 2021, as workers left the labor force altogether rather than finding jobs. Inflation, as measured through the Consumer Price Index (CPI), saw its year-over-year rate decline 0.7 percentage points from May to June 2026, but remains at an elevated 3.5 percent. The CPI continues to reflect ongoing geopolitical tensions, though core inflation, which removes volatile food and energy prices, has not yet absorbed these pressures.
Soft data available suggests that consumers and business owners continue to feel financial pressures. National consumer sentiment was 49.5 in June 2026, down 11.2 points from June 2025 as elevated prices remain a source of frustration for consumers. The NFIB Small Business Optimism Index, a monthly measure of economic health and financial confidence for small businesses, rose to 97.4 in June, nearing its 52-year average of 98. However, the NFIB Uncertainty Index, which measures small business owners’ confidence in assess the future, was measured at 89, well above its historical average of 68. Against this backdrop, the Federal Open Market Committee (FOMC) opted to maintain the federal funds rate at its target range, holding at 3.50 to 3.75 percent for the fifth consecutive meeting in July 2026.
Locally, latest findings from the Lee County Executive Business Climate Survey align with national data. The Executive Business Climate Index improved 3.2 points from the previous quarter to 53.6, largely driven by improvements in perceptions for future economic conditions (up 5.7 points) and future industry conditions (up 3.6 points). The current hiring trend index slipped 0.4 points to 48.4, highlighting the cooling labor market observed locally. However, the future hiring trends index, which looking at expectations for hiring over the next 12 months, improved 1.2 points to 53.9, suggesting optimism in improved hiring conditions moving forward.
The current survey also asked local business owners about cost pressures their businesses have faced over the past 12 months. Results show Lee County business owners were squeezed across materials, labor, and especially energy costs, with most absorbing the increases through thinner margins rather than passing them fully to customers, even among those who did raise prices. That restraint comes despite soft demand, as more businesses reported falling customer demand than rising demand over the past year. In response, businesses have leaned heavily on strategies closely tied to internal cost and staffing decisions such as reducing operational expenses, adjusting product mix, and workforce restructuring, which are short-term focused and more flexible. Looking ahead, 55 percent of responding business owners expect cost pressures to increase over the next 12 months, while another 34 percent expect pressures to remain the same.
Downloads:
Lee County Executive Business Climate Survey Third 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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