In January 2024, the D.C. Policy Center’s Alice M. Rivlin Initiative on Economic Policy & Competitiveness debuted its Quarterly Business Sentiments Survey. The objective of the survey is to provide real-time insights into business experiences in D.C. and the broader region for elected officials, the media, and the public.
In 2025, over four rounds, the survey asked about recent business performance, six-month expectations for the local, regional, and national economies, and sentiments on topics such as public safety, artificial intelligence adoption, federal employment changes, and recent immigration policies.
Over the course of 2025, the survey averaged 282 respondents per round. Many participants came from well-established businesses with twenty or fewer employees, and the surveyed businesses represented a range of sectors, the most common being professional, scientific, and technical services. While the survey reached a key segment of the D.C. region’s business community, it was subject to the standard limitations of online surveys, including uncertainty regarding representativeness.
Similar to the way the Federal Reserve uses anecdotes and insights from business leaders to inform monetary policy, the quarterly Business Sentiments Survey reveals how economic conditions are being felt on the ground. These insights provide greater context for what the hard data suggests and offer clues about what the hard data might not capture regarding the local and regional economies.[1]
Five insights emerge from the 2025 survey.
Insight #1: Over the course of 2025, an increasing share of surveyed businesses reported declining revenues in the three months before the survey.
Throughout 2025, an increasing share of respondents said their revenues had fallen in the three months leading up to the survey. That share rose from 25 percent in the first round of 2025 to 40 percent by the fourth. The key takeaway here is the negative directional signal. Notably, this trend largely coincided with diminishing six-month expectations about the local, regional, and national economies, which suggests that the reported pessimism may be grounded in recent experience.
Insight #2: Expectations of surveyed businesses became markedly more pessimistic in 2025.
Surveyed businesses became less optimistic about the District’s economy over the course of 2025. In the first round of 2025, which was conducted in mid-January, 23 percent of respondents expected that the District’s economy would improve over the next six months. By the fourth round, conducted in mid-October, only 9 percent expected that the District’s economy would strengthen.
Two factors likely contributed to the diminished optimism.
The first is recent U.S. trade policy with its variable use of tariffs. Such policies have contributed to greater uncertainty and will lead to increased costs for businesses and consumers. Second, the reductions in federal government employment have dampened economic activity. Between January 2025 and December 2025, federal government employment in the District declined by almost 13 percent and by nearly 14 percent in the broader D.C. metro region.
Insight #3: Many surveyed businesses reported that their success depends on the federal government.
In the third round of 2025, the survey inquired about how federal government actions were affecting local businesses. Almost 70 percent of surveyed businesses reported that their success was “somewhat” or “very” dependent on the federal government. This dependence may take various forms, receiving federal funding or contracts, utilizing services from federal agencies, or relying on foot traffic and patronage from federal employees.
The trajectory of federal government activity is difficult to predict. The historical record suggests that reversals are possible. In the mid-1990s, federal government employment and presence in the District contracted and then rebounded in subsequent years. Still, the survey results point to a possible shift in how local businesses view the federal government: what was once likely seen as a stabilizing anchor is now seen as a source of risk.
Highlight #4: Many surveyed businesses view recent immigration policies as a headwind—or at best neutral.
In the fourth round of 2025, 47 percent of surveyed businesses reported that recent immigration policies or enforcement had “somewhat” or “very” negatively affected their overall success between January and October 2025. Furthermore, a non-trivial number of surveyed businesses reported that recent immigration policies have increased labor costs or made it more difficult to hire or retain workers.
At the same time, almost half of surveyed businesses reported that recent immigration policies have had minimal or no impact on their overall success. This survey result likely reflects the composition of the District’s workforce. Important employment sectors such as the federal government and professional and business services rely less on immigrant labor than sectors such as construction, leisure and hospitality, and to a lesser extent, healthcare and education. For sectors with greater exposure to immigrant workers, tighter enforcement is more likely to bind. The likely economic consequences will be higher labor costs and upward pressure on prices paid by consumers.
Insight #5: Surveyed businesses’ concern about public safety increased despite declining crime.
In the first round of 2025, 49 percent of survey respondents reported being more concerned about crime than in January 2024, even as crime rates declined. Forty percent reported the same level of concern, and the remaining 10 percent indicated that they are somewhat or much less concerned about crime.
While the divergence between public opinion about crime and actual crime trends is not new, public opinion about crime should not be dismissed. Public opinion can matter economically. Concern about crime can act as a shadow tax: firms invest in more security, adjust hours, alter locations, or scale back activity they would otherwise undertake if crime were less of a concern.
What is new in the 2026 quarterly Business Sentiments Survey?
In 2026, the quarterly Business Sentiments Survey will feature new core questions to better gauge market conditions, including questions about customer demand, core input availability, and business costs. The 2026 survey will also have an open-ended question, allowing business leaders to describe emerging challenges.
As in the past, the D.C. Policy Center will use the survey results in three related ways:
- Identify salient problems facing the business community and local economy.
- Inform the prioritization of policies for analysis.
- Shape the D.C. Policy Center’s research agenda.
Support Our Work
The quarterly Business Sentiments Survey is a core product of the D.C. Policy Center’s Rivlin Initiative on Economic Policy & Competitiveness. It provides real-time insights about the experiences of the local business community that serves as a complement to official economic data and helps inform public debate.
You can support this work in multiple ways:
- Subscribe to the D.C. Policy Center’s weekly newsletter.
- Participate in the survey and encourage your network to do the same.
- Support our work. Your support sustains independent, data-driven research that helps the District become more competitive, resilient, and inclusive. A gift today ensures we can continue capturing business perspectives and translating them into high-impact policy analysis for residents, workers, and employers across the city.
[1] The Fed’s Beige Book records the insights that Federal Reserve officials learned from surveying and talking with business contacts. The relevant Federal Reserve Bank for the District of Columbia and the broader D.C. region is the Richmond Fed.