The D.C. Policy Center’s Rivlin Initiative for Economic Policy and Competitiveness recently finished the fourth round of its Quarterly Business Sentiments Survey for 2025. Conducted online for two weeks in October, this round asked respondents about their six-month expectations for the local, regional, and national economies, and the effects of recent immigration policies or enforcement. The survey’s objective is to provide real-time insights about the D.C. region’s business community experiences to local policymakers, the media, and the public.
251 respondents—primarily owners or executives—completed the fourth round of the 2025 Business Sentiments survey.[1] Many respondents represented companies that have been in business for over a decade (56%), and an even larger share came from businesses that employ 20 people or fewer (82%). The survey captured businesses in a variety of sectors, including professional, scientific, and technical services (20%), restaurants and eating places (18%), health care (10%), real estate (8%), and the nonprofit sector (8%). Although constrained by the standard limitations of online surveys, this round captured insights from an important segment of the D.C. region’s business community.[2]
Finding # 1: 40 percent of survey respondents reported revenue declines during the three months leading up to the survey.
At least half of respondents indicated little to no change in staffing levels, employment, or office and retail space. However, the share of survey respondents reporting a decline in revenue increased to 40 percent—the highest share recorded in 2025. Earlier in the year, that share was 25 percent in the first round, 37 percent in the second, and 36 percent in the third.
Finding # 2: Six-month expectations for the local, regional, and national economies remain notably pessimistic.
Similar to round three of 2025, round-four respondents remained quite pessimistic about the outlook for the local, regional, and national economies. Only 9 percent expected the District’s economy to be somewhat or much stronger in the next six months. Expectations for the regional and national economies were not materially more optimistic—10 percent anticipated some strengthening of the regional economy, and 12 percent anticipated some strengthening of the national economy.
Finding # 3: Most respondents reported that recent immigration policies or enforcement have either negatively affected their affiliated business or had little to no effect.
Forty-seven percent of respondents reported immigration policies or enforcement between January and October 2025 had minimal or no impact, and an equal share stated that immigration-related policies had negatively affected their business to some degree. Only six percent indicated that these policies or enforcement actions had a positive effect on their affiliated business.
It is not surprising that a notable share of businesses reported being negatively affected by recent immigration policies. According to standard economic theory, tighter immigration policies or enforcement will limit the supply of labor. A more limited labor supply not only makes it more difficult for firms to find workers but also raises labor costs as businesses compete for a smaller pool of available workers. To be sure, not all businesses are likely to be equally affected by tighter immigration policies. Businesses that rely on immigrant workers—such as restaurants or construction firms—are more likely to be negatively affected.
Finding #4: Among respondents who reported a change, more surveyed businesses are finding it harder to retain or hire workers because of recent immigration policies.
While 67 percent of survey respondents reported that their businesses experienced little to no change in the ability to retain or hire workers between January and October 2025, 31 percent indicated that retaining or hiring staff had become somewhat or much harder because of recent immigration policies or enforcement. In contrast, only 2 percent said that hiring or retaining workers had become somewhat or much easier. But over the next 12 months, a notably larger share—or 37 percent—of respondents expect retaining or hiring workers to be somewhat or much harder. These results are consistent with standard economic theory and what one would expect of the surveyed businesses that noted a change in conditions.
Finding # 5: 27 percent of surveyed businesses indicated that labor costs had somewhat or substantially increased between January and October 2025 because of immigration-related policies.
Round-four survey respondents’ reports on labor costs align with economic theory. Of those who noted a change, 27 percent indicated that costs had somewhat or substantially increased between January and October 2025 because of immigration-related policies, while only 2 percent reported that costs had somewhat or substantially decreased. The remaining 71 percent stated that recent immigration policies had little or no effect on labor costs. However, over the next year, a little over 1 in 5 respondents expect labor costs to increase to some degree.
Conclusion
The fourth round of the 2025 Quarterly Business Sentiments Survey suggests that businesses in the D.C. region are facing significant challenges. The results indicate pessimism about the local, regional, and national economies. The results also suggest that tighter immigration policies are making it more difficult for some businesses to hire or retain workers, driving up labor costs, and complicating efforts to operate successfully in the District and the surrounding region.
[1] The raw sample size is 251 respondents. The weighted sample size is 250.3. Responses are weighted by the region’s industry composition using QCEW data (2024 Q4). The weighted sample size for the questions about immigration policies or enforcement was 158.59. The raw sample was 166. The results presented in this report are based on the weighted responses. Please note that this report follows the format and organization of past survey publications.
[2] One limitation of the survey is that one cannot be confident that respondents’ sentiments are representative of those who did not respond. Survey respondents were primarily recruited through email.