Northern Virginia business leaders’ confidence drops in Q2

The confidence of business leaders with operations in Northern Virginia declined in the second quarter of 2025, according to a survey released today.

From April 21-25, 298 executives and company owners completed the survey, the second such study conducted by the Northern Virginia Chamber of Commerce (NVC) and Pinkston, a Falls Church-based communications firm.

Northern Virginia as a whole is bracing for an economic hit due to President Donald Trump‘s efforts to cut government spending. Since Trump returned to office in January, thousands of federal employees have been fired or put on leave. While data continues to trickle in about the regional impact of cuts, we know that in 2023 about 175,000 federal jobs were held by residents of Northern Virginia, according to the Northern Virginia Regional Commission. The unemployment rate for Northern Virginia in March was 3.2%, up from 2.8% in January.A hub for federal contractors, Northern Virginia will also likely take a hit from Trump’s cuts to federal contracts.

“The findings of this pulse survey reinforce what we’ve been hearing from our membership over the past few months: a significant and growing concern among business leaders regarding the trajectory of our regional economy, largely driven by the impact of federal actions,” Julie Coons, president and CEO of NVC, said in a statement.

“DOGE is shaking up the Northern Virginia economy more than business leaders originally expected,” D.J. Jordan, senior vice president at Pinkston, stated in a news release. “It’s no surprise that business leaders are pessimistic, considering our region’s reliance on the federal government, however, there are signs within this survey that demonstrate Northern Virginia’s growth in other industries, such as technology and finance. While business leaders are pessimistic about the Northern Virginia outlook overall, there is a silver lining in that they are more optimistic about their own companies.”

The first survey by NVC and Pinkston, conducted in January, reported 60% of leaders queried believed Northern Virginia’s economy would grow over the next six months. This time around, 59% of those surveyed said they believe the region’s economy will decline over the next six months.

That said, more than half of the business leaders surveyed reported being very or somewhat optimistic about their companies’ performance over the next six months. That was a drop, however, from the 81% who expressed optimism in their own operations the first time around.

In the second quarter survey, only about 12% of business leaders expected to increase hiring, while 49% surveyed in the first quarter anticipated needing to grow worker head count. Less than 20% anticipated needing to cut employees in the second quarter, an increase over 6% who anticipated making cuts in the first quarter survey.

A healthy chunk, 43%, of business leaders with Northern Virginia operations expect their company’s capital spending to decrease in the next six months, while 21% of business leaders anticipate increasing capital spending. In the first quarter survey, 54% of leaders planned to increase capital spending.

Issues most impacting business growth, according to the leaders surveyed, are: federal layoffs (63%), inflation (62%) tariff policies (53%) workforce (30%) supply chain issues (29%) and federal procurement (27%).

NVC, according to Coons, is developing a report and policy strategy, called the NOVA Roadmap, to address challenges and ensure Northern Virginia’s economic future.

Northern Virginia’s $302 billion gross domestic product represents nearly 42% of Virginia’s gross domestic product and is larger than 24 other states, according to NVC.