Released today, the latest Principal Financial Well-Being Index, which measures business sentiment and outlook, was 6.50 on a scale from 1 to 10, its third-lowest reading in four years. 

To determine the results, 1,000 for-profit business decision-makers filled out an online survey from Sept. 26-Oct. 17. The most recent index score of 6.50 is down slightly from July’s 6.80 and up from April’s 6.02. Comparatively, the index was at 7.80 a year ago in November 2024 and at 5.41 in November 2020, during the pandemic.

For large businesses with 500 or more employees, the index came in at 7.05, a 1.5% decrease from July. For small- to medium-sized businesses with 499 or fewer employees, the index was at 5.97, a 4.8% decrease from July. 

Highlights of the survey include:

• While less than half (45%) of U.S. business decision-makers are optimistic about the overall economic outlook for the next 12 months, 62% of businesses expect growth in the next year.
• 73% of employers report higher expenses over the past three months, unchanged from July.
• Employment remains largely stable in the private sector, with 91% of businesses maintaining staff levels (44%) or increasing headcount (47%) over the past three months.
• 60% of employers expect artificial intelligence to influence wage increases, and 23% expect it to influence staffing increases in the next one to two years.
• Health care costs remain the leading concern for employers (62%), followed by labor costs, inflation and economic stability.

The index reported that even as economic uncertainty tempers their outlook, the data shows businesses are taking a practical approach to preparing for growth by building strong balance sheets, supporting their employees and integrating new technology.

Businesses were also asked about AI and how it will affect their business and staffing decisions in the future:

• 34% said there would be no change to staffing or wages.
• 23% said staffing and wages would increase.
• 22% said staffing would not change and wages would increase.
• 19% said they don’t plan on using AI.
• 15% said staffing would decrease and wages would increase.
• 6% said staffing and wages would decrease.

Large-business decision-makers most commonly said, at 32%, that staffing and wages would increase with AI use. When it comes to small- and medium-sized businesses, 42% said staffing and wages would remain unchanged by AI, the most common answer by that group. 

“The story of 2025 is that many businesses are primed for growth, but broader conditions haven’t caught up yet,” Amy Friedrich, president of protections and benefits at Principal, said in a news release. “Employers are ready to modernize, engage their teams and grow, while diligently planning for multiple scenarios amid ongoing uncertainty.” 

The full report is available online.