U.S. small business owners head into the second half of 2026 with growing confidence in their own prospects, even as faith in the broader economy continues to drop.

The Citizens Q3 2026 Business Pulse survey found that half of small business owners (50%) expect their revenue to increase over the next three months, the highest level of optimism recorded this year. Yet that optimism sharply contrasts how owners view the macroeconomic backdrop: just 24% say they are extremely or very confident in the U.S. economy, down from 36% in Q2 2026.

“Small business owners are proving they can hold their own, even when the world around them is full of uncertainty,” said Mark Valentino, Head of Business Banking at Citizens. “The data is not showing a contradiction, but an opportunity. Those who forge ahead and continue to be nimble and innovative will separate themselves from the competition.”

Rising costs remain the defining external pressure. More than half of respondents (51%) cite inflation and cost management as their biggest business challenge, outpacing economic uncertainty (43%) and customer acquisition (39%).

In the face of these external pressures, business owners are not making dramatic moves. Hiring plans remain largely unchanged, with 64% of respondents planning to keep full-time headcount the same over the next three months and just 18% planning to increase full-time staff. Credit appetite tells a similar story: 67% expect no real change in their use of loans, lines of credit or other financial resources. Across the board, owners appear focused on running their businesses efficiently and continuing to chart the course, rather than overextending in either direction.