As 2025 began, a new federal administration brought a wave of executive orders, policy reversals, and evolving trade policies. Uncertainty surrounding tariffs and regulatory changes contributed to a cautious outlook among business owners across the nation and Hawai‘i was no exception. The first quarter was marked by hesitation as businesses recalibrated amidst this changing political and economic landscape.
However, in recent weeks, signs of stability have emerged. Key trade negotiations are showing progress, energy prices have significantly declined, and the nation just recorded its lowest monthly inflation rate in four years. These developments suggest that the outlook for the remainder of 2025 may improve.
Business Sentiment: Clouded by Uncertainty
When asked about the 12-month economic outlook, only 23.1% of respondents expected improvement, while a combined 61.6% expected conditions to worsen or stay the same.
No respondent selected “Much Better” as their outlook.
This marked a drop in optimism compared to Q4 2024, when 38.5% reported the economy was the same as 2023 but better than 2019.
Sales Revenue: Modest Gains
Compared to the same quarter last year, 53.8% reported improved sales revenue while 38.5% stayed the same. Only 7.7% saw a decline.
Pre-pandemic, in Q1 2019, the numbers were similar, with 53.8% reporting better sales and 30.8% saying it was worse.
This suggests that while uncertainty clouds future expectations, many businesses have found a post-pandemic rhythm with improving revenues compared to 2019.
AI Adoption Rising
More than half of respondents (53.8%) reported using AI in their businesses, a substantial increase from the 30.8% adoption rate reported at the end of 2024. Applications ranged from marketing and research to document preparation and workflow automation.
Workforce & capital remain ongoing challenges
Hiring continues to be a top issue, with 33.3% struggling to find skilled workers and others citing high training costs, poor retention, or low pay competitiveness.
Regarding access to capital access, one-third of businesses report challenges securing loans, grants, or investment. Barriers include documentation requirements, creditworthiness, and financial literacy gaps.
When asked what the Native Hawaiian Chamber of Commerce (NHCC) could do to help, many respondents requested more targeted networking (not just social events), expanded reach beyond Honolulu, and advocacy for local business-friendly policies.
As we compare Q1 2025 to the end of 2024, sentiment has cooled, but business performance shows signs of resilience. While concerns persist over government regulation, hiring, and financing, our members remain resourceful and adaptive.
With AI becoming a regular part of business operations and federal economic indicators turning positive, NHCC will continue to advocate for and invest in programs that improve access to capital, workforce training, and community-centered economic development.
Mahalo to our members for your candid feedback and for helping us tell your story. And mahalo to Rebecca Soon and her team at Ward Research for their work in refining our member survey. Their insights have helped us improve data clarity and relevance since our inaugural effort in 2024. Here’s to a strong 2025!
For more information or questions contact andrew@nativehawaiianchamberofcommerce.org.
