When it comes to the economy, Edward W. Burman Jr. is of two minds – local and national.
Burman, president of Warwick-based commercial building contractor E.W. Burman Inc., is convinced the election of President Donald Trump will be a big boost economically for the country, even if it doesn’t happen immediately.
“I’m much more optimistic with the changes down in Washington,” he said. “But they were dealt a terrible hand [by the Biden administration]. So, there will be some lag time getting things back in gear.”
In Rhode Island, Burman is not so sure the future is bright.
He has nagging concerns about a “feckless” state government that may be unable to take steps to improve the business climate because it will be hamstrung by a gaping budget deficit of hundreds of millions of dollars. And there are the rising costs of a health care system for employers and employees that he says the state seems unable to rein in.
“[The cost] goes up every year,” Burman said. “It never goes down. I have a lot of friends who are doctors, and they are always complaining about the system. It needs a radical change.”
There are plenty of Rhode Island companies grappling with similar mixed feelings, according to Providence Business News’ Winter 2025 Business Survey.
About one-third of the business owners and executives who responded to the biannual survey – 37.4% – said they foresee Rhode Island’s economy improving slightly or significantly in the next 12 months, up from 34.9% six months ago but a massive decline from the winter of 2017 when that number peaked at 76.4%.
At the same time, more than half the respondents
(56%) held a positive outlook for their businesses, projecting that their companies would be doing better a year from now, a rate that’s edged upward in recent surveys since hitting a low of 46.4% in the winter of 2023.
However, the number of businesses who foresee their business being in a worse state a year from now jumped almost threefold from the survey last summer, from 3.7% to 11%.
[caption id="attachment_486639" align="aligncenter" width="1024"]

HEALTH CARE ANGST: Rising health care costs replaced the shortage of qualified workers as the biggest challenge facing local businesses. After a dip last summer, health care concerns were identified by nearly 6 in 10 respondents, followed by demand for workers dropping to just above half of respondents. The next-biggest challenges
among the perennial issues faced by employers were taxes and government fees/bureaucracy, respectively.[/caption]
[caption id="attachment_486637" align="aligncenter" width="1024"]

WADING IN: The number of companies expecting to hire dipped slightly from a year ago but is still in line with
survey results since 2021. It’s a similar holding pattern for major company investment, with the
percentage planning to purchase big-ticket items in the next quarter steady at just under 25%.[/caption]
Who can blame businesspeople for being ambivalent?
Inflation has cooled but still threatens to flare up, forcing the Federal Reserve to rethink its plans to cut its benchmark interest rate this year. Meanwhile, Rhode Island’s unemployment rate is a full percentage point higher than it was a year ago but has remained level at 4.6% since August. And the state must figure out a way to close a $250 million budgetary shortfall.
Meanwhile, a contentious presidential race has been settled, and the Trump administration has returned to the White House with the promise of being more business friendly.
Edward M. Mazze, a distinguished professor of business administration at the University of Rhode Island, says it appears the outcome of the national election was a prime variable in the winter survey’s results, perhaps buoying the optimism of some business owners and executives.
“People seem very optimistic that taxes are not going to go up. And there is a chance they may even go down,” said Mazze, who helped PBN develop the survey in 2008. “And they feel the number of restrictions affecting their business is going to go down. And at the very least, inflation will not go up.”
[caption id="attachment_486638" align="aligncenter" width="1024"]

INCENTIVES PLEASE: Making it less costly to do business remains the biggest ask of state government for nearly
7 in 10 survey respondents, a level that has roughly held steady since PBN began asking the
question in 2012. Requests for more tax incentives jumped since the summer, while reducing
red tape and more support for workforce development programs ticked down. With Washington Bridge
repairs and upgrades ongoing, it’s no surprise calls for improved transportation infrastructure
are holding at historical highs of more than 3 in 10 respondents.[/caption]
PAIN POINTS
The PBN survey, which has been conducted twice a year since 2008, is not scientific. PBN sent 21 questions to 1,167 businesses statewide in the newspaper’s database. One hundred returned the survey, a mix of businesses ranging from manufacturers to real estate agencies, construction contractors to public relations firms. Most were small and midsize companies.
The survey responses were collected in December, and in some ways, the results indicate that the end of 2024 was lackluster for Rhode Island businesses.
While nearly half of the respondents – 46.9% – said their net income in 2024 had improved over the previous year, less than one-third of the survey takers (29%) said their business activity in the fourth quarter of 2024 had been stronger than the previous quarter. That’s the lowest percentage in the 18-year history of the survey.
Meanwhile, the appetite for hiring appears to be starting to wane.
Less than half of respondents (46.9%) said they were planning to add workers at the start of 2025, down from 48.1% six months ago and 52.8% a year ago. At the same time, 5% of those surveyed said they were expecting to reduce their workforce, compared with less than 1% six months ago and none a year ago.
Mazze cautioned that there can be nuances between the lines when looking at survey results.
“Many businesses say they have cut back,” he said. “But that may not be because they are in trouble but because they have become more efficient in what they are doing.”
The survey results also signaled that inflation, while no longer a runaway problem, could continue to dampen the economy. Even though the rate stood at 2.9% in December – close to the 2% that is generally deemed healthy for the economy – respondents indicated that they were feeling the price pinch and looked to pass it on to customers.
More than three-quarters of those surveyed (75.5%) said they paid higher prices for materials and supplies than in the previous quarter. That result was up from 70.5% in the summer 2024 survey. And more than one-third (34.3%) said they planned to raise their prices in the first quarter of 2025, up from 21.5% six months earlier.
[caption id="attachment_486640" align="aligncenter" width="1024"]

HOLDING PATTERN: Business activity is stagnant, with the percentage of companies reporting quarterly improvement
dipping this winter to its lowest level since PBN began conducting the survey in 2008. Companies
reporting improved profits are holding steady at just under 50%, though prospects for the state
economy over the next year are down slightly from a year ago and well below historical highs.[/caption]
And the biggest pain points from inflation?
Sixty-four percent of respondents said having to increase wages has been an immediate effect of inflation, while 54% said it had increased their fixed costs.
Burman, whose firm was founded in 1964, said there could be some tough times ahead for contractors that rely in part on revenue from public works and infrastructure contracts, including his company, which employs about 30 people.
In addition to paying more for building materials and supplies, he foresees funding drying up for government projects. The difference needs to be made up by the private sector, Burman said.
“The state is not going to spend a lot of money on construction. There are some school projects already in the pipeline. So that might be good for a year,” he said. “But next year and the year after, it’s going to continue to go down.”
HEALTH CONCERNS
Indeed, there’s never a shortage of obstacles facing Rhode Island businesses.
In the latest PBN survey, health care costs ranked as the biggest business challenge among respondents at 57.7% (up from 54.8% a year ago), followed by the shortage of qualified workers (52.6%, down from 62.5% a year ago) and taxes (44.3%, down from 49% a year ago).
At the same time, salaries of new hires (38.8%) and health insurance (35.7%) topped the list of the biggest growing expenses.
Health care can be doubly problematic for businesses because rising costs have spurred job candidates to prioritize this benefit, raising the insurance line item even more for businesses, Mazze said.
“If you are an employer with four employees, you now have five seats at the table,” he said. “The fifth seat is called health care.”
The situation is fueling concerns at companies such as Trico Specialty Films Inc.
Chief Financial Officer Paul Conforti said in the comment section of the survey that Trico has been encouraged by a “steady flow” of customer orders in the final quarter of 2024. But that has been tempered by burdensome utility and health insurance costs that “are rising at steeper rates than we can pass on to customers.
“Those two areas are concerning,” he said.
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MEMBER OUTREACH: Lauren Slocum, right, CEO and president of the Central Rhode Island Chamber of Commerce, meets with Tim Oswald, owner of Floor Coverings International of Greater Providence, the new member of the Central Rhode Island Chamber. Slocum says other members are optimistic about 2025 but are worried about factors such as health care costs.
PBN PHOTO/MICHAEL SALERNO[/caption]
Lauren Slocum, CEO and president of the Central Rhode Island Chamber of Commerce, has been hearing similar chatter amongst the Chamber’s members.
“People are optimistic about the possibilities for 2025, but they are still hesitant about not only finding appropriate, fully trained staff for their industry, but what those costs are,” she said. “And that’s where health insurance plays in. To retain a good employee by providing coverage, although they aren’t required by law to pay 100% of the health insurance, many of them will pay a significant portion. So it’s also the cost of all of that.”
Primary care doctors have complained that the state’s insurance reimbursement rates remain too low to keep practicing in Rhode Island. The same applies to dentists, according to Dr. Andrew Gazerro, a West Warwick dentist in private practice and president of the Rhode Island Dental Association.
“Our biggest issue has always been the ability to attract qualified dental assistants, hygienists and dentists in general to come to Rhode Island or to remain in Rhode Island,” he said.
And, among the dentists who remain, many have decided to go outside of the insurance network, rather than collect reduced fees from insurers.
“We aren’t charging more; we are charging normal fees. But patients pay for things they didn’t have to pay for in the past,” he said.
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INVENTORY ISSUES: Realtor Arthur Chapman, leader of the Aquidneck Team at William Raveis Real Estate, says that because of a lack of homes on the market in Rhode Island, he has a wide range of prospective buyers who are ready to buy.
PBN PHOTO/DAVID HANSEN[/caption]
For Realtor Arthur Chapman, leader of the Aquidneck Team at William Raveis Real Estate’s Newport office, the lack of housing supply is a big challenge for the state economy, although he argues that there’s also a downside to new home production, creating a drain on municipal resources.
With the state pouring hundreds of millions of dollars into housing production, Chapman hopes increased housing density in a city such as tourism-dependent Newport doesn’t do more damage than good.
“When a new home or development is built, the municipality actually loses money,” he said. “So there must be a balance between new development and making sure the existing taxpayers aren’t slammed with surprise bills.
“The challenge will be finding things to buy,” Chapman said. “The real problem is inventory. Because if you are a seller who wants to stay in Rhode Island, where do you go?”
Still, Chapman is bullish in 2025.
He said he has more than a dozen prospective buyers who have insisted he call them the moment a property hits the market. “I have a $40 million buyer, and I have a $330,000 buyer. And everything in between,” he said.
IN NEED OF SUPPORT
When asked about important actions state government could take to support businesses in the year ahead, executives continued to place “reducing the cost of doing business” highest on the to-do list, with 69.4% of those surveyed marking that as important, down slightly from 70.5% a year ago.
Transportation infrastructure still seems to be at the forefront of many respondents’ minds more than a year after the emergency closure of the westbound side of the Washington Bridge. More than a third of those surveyed (34.7%) said improving transportation infrastructure was crucial, up slightly from 33.3% a year ago but still significantly elevated from the 19.8% who marked it as important in the summer 2023 survey, before the bridge failure caused economic havoc on both sides of the bridge.
At the same time, when asked to rank the greatest benefits of operating in Rhode Island, “access to transportation” was marked by 20.4% of respondents, fourth on the list behind proximity to customers (78.5%), access to university resources (22.6%) and quality of labor force (21.5%).
The reduction in inflation still hasn’t been enough for many businesses to feel comfortable about making big-ticket purchases such as capital equipment in the next quarter. Less than one-quarter of the respondents (23.2%, up from 21.2% a year ago) said they planned to make such purchases in the near future.
The PBN survey also contains two questions about international business dealings.
Those surveyed were asked if their business buys or sells goods and services internationally – 73% said no (down from 76.9% a year ago), 25% said yes (up from 19.2% a year ago) and 2% said the matter was under review.
Respondents were also asked if their company expected to increase or decrease international business dealings in the next year. While 77.8% said it was under review, 15.3% said an increase was expected (up from 14.7% a year ago), and 6.9% said a decrease (up from 5.3% a year ago).
These questions are particularly noteworthy as President Donald Trump returns to the White House already threatening to add 25% tariffs on imports from Mexico and Canada, and to increase tariffs on Chinese imports.
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RIGHT DIRECTION: Whatever uncertainly Rhode Island businesses have about the state economy or a new
administration in Washington, D.C., confidence in their own prospects continues to inch upward
after falling below 50% in 2022 for the first time since 2008. This winter marks the fourth consecutive
result with a slight majority expecting better things for their business over the next year.[/caption]
At the Central Rhode Island Chamber, where many members are located in the once-heavily industrialized Pawtuxet Valley, Slocum says a lot of business owners still deal in international imports and exports and are watching closely what’s happening in Washington, D.C. “They’re not sure of the positive or negative impact it’s going to have on their business,” she said.
That dynamic played out in the comments section of the survey, with one Rhode Island manufacturer – Trico Specialty Films in North Kingstown – saying Trump’s proposed tariffs would help sales as prospective U.S. customers looked to “onshore” purchases while a Pawtucket maker of membranes, fabrics and coatings predicted that the trade war of words would hurt the company.
Indeed, Slocum says the divergent views displayed in the PBN survey – not only on international trade but on the local and national economy – are playing out in conversation in the business community, too.
“[Owners and executives] themselves are optimistic about the business but also concerned over how their customer or consumer or clients will do,” she said. “Will they continue to spend money the way that they have in the past? So they may feel good about the economy generally overall but not so much for their customer base.”