OLYMPIA, WA – A new survey from the Association of Washington Business shows declining economic confidence among employers, with nearly half of business leaders saying they are considering leaving the state as tax and cost pressures increase.

According to the quarterly Washington Employers Survey, 44% of business leaders said they are considering moving their personal residence out of Washington, most often to Arizona, Idaho, Montana or Wyoming. At the same time, the share of employers considering relocating their business operations out of state has nearly doubled over the past year, rising from 9% to 17%.

Taxes and the rising cost of living were cited most frequently as reasons for considering relocation, the survey found.

“Washington employers are growing more pessimistic about the direction of the state economy, largely because of the rising tax burden,” said AWB President Kris Johnson. He said many small- and medium-sized businesses are under strain and are not optimistic about business prospects. According to the survey, one-third of respondents said their businesses are struggling or in a downturn, while about 20% said they are growing and nearly half reported flat conditions.

Taxes were identified as the top challenge by 64% of respondents, followed by health care costs at 62% and government regulations at 54%. While concern about inflation has declined over the past year, dropping from 52% to 40%, it remains the fourth-ranked concern. Worries about tariffs also declined from 37% to 30%, though 54% of respondents said tariffs continue to negatively affect their businesses.

The survey shows Washington’s tax burden has risen sharply as a concern over the past year. In fall 2024, it ranked fourth among challenges facing employers. By spring 2025, it became the top issue and has remained there since.

Economic outlook indicators also show continued weakness. Thirty-three percent of respondents described the state economy as weak, while just 9% rated it strong. Confidence in the national economy was higher, with 24% describing it as strong or very strong.

Expectations of a recession in Washington within the next year declined from the previous quarter, falling from 41% to 34%, though that figure remains double the level reported a year ago.

The Winter 2026 Washington Employers Survey is based on 429 responses from business owners and operators across the state, collected between Jan. 13 and Feb. 2. The Association of Washington Business conducts the survey quarterly.