Nearly seven in 10 Arizona businesses say they will invest in growth rather than trim budgets over the next 12 months, a bullish stance even as owners grapple with tariffs, fast-changing fraud schemes and a breakneck AI adoption curve. The midyear snapshot suggests Phoenix-area leaders expect demand and profitability to rise, but many are still pacing big decisions while they watch broader economic signals.
The findings come from Columbia Bank's 2026 Business Barometer, an annual survey of 1,186 small and midsize businesses that was fielded between April 28 and May 7, 2026, and carries a 2.7% margin of error. The bank's national report shows a general tilt toward investment over cost-cutting, even as many firms say they are timing expansion moves amid near-term volatility.
Regionally, nearly 70% of Arizona firms said they will favor investments over belt tightening, while 66% rate the current economy as excellent or good and 60% expect it to improve over the next year, as reported by Greater Phoenix In Business. At the same time, more than half of respondents said they plan to delay major commitments for at least six months while keeping an eye on tariffs and inflation.
AI Drives Local Investment Plans
Arizona companies are putting AI near the top of the shopping list: 60% rank it as a top-three investment priority. Ninety-seven percent said AI will increase productivity in the coming year, and 87% expect it will create demand for more skilled or specialized roles.
Over the last year, businesses have shown increasing optimism and most lean toward investments that improve their competitive position, Shawn Thompson, Columbia Bank's Southwest regional director, told the Phoenix Business Journal. His comments help explain why many companies are prioritizing AI and targeted tech spending over sweeping cost reductions.
Fraud, Tariffs Keep Owners Cautious
Cybersecurity and payment fraud remain top concerns. Columbia Bank's report finds seven in 10 businesses nationally suffered a financial loss from fraud in the past year, and Arizona respondents reported a slightly higher incidence at about 74%, with nearly half of those losses exceeding $10,000. Tariffs have also hit local firms: roughly 70% of Arizona businesses said they paid a tariff over the past 12 months versus 57% nationally, and many said the unpredictability of tariff implementation has been as disruptive as the direct cost increases, per a press release via PR Newswire.
How Companies Are Financing Growth
When firms do move on expansion, they say they will most often tap a line of credit (67%) or a traditional bank loan (58%), while about a third are considering private credit or equity financing. Businesses also plan targeted investments in payment authentication, vendor verification and external cybersecurity partners as they position for growth, according to Columbia Bank.
For Phoenix-area owners, the takeaway is pragmatic: optimism about sales and profits paired with a preference for staged investments and short-term credit rather than big, immediate expansions. Local bankers and advisers say that mix of tech upgrades plus conservative financing will shape hiring and real estate plans through mid-2027.
