When siblings Kelly and Kiffin Ward co-founded their Warren metal fabrication business, Ward’s Manufacturing LLC, in early 2024, they set out with a vision of highlighting American-made products and local job creation.
They got off to a strong start. The Wards soon had six employees, with plans to hire another two in the near future. Through the first quarter of 2025, the business was hitting its targets and attracting preferred customers.
That took a turn in March, when massive 25% tariffs on steel and aluminum enacted by the Trump administration went into effect.
“Within about two weeks of the tariffs hitting, we started to see decreased demand,” Kelly Ward said.
“Many of the larger companies, which are our best customers, decided to put things on pause as a wait-and-see,” she said. “Not just because the costs increased but because of the uncertainty of what percentage the tariffs are going to be.”
Ward’s has pushed ahead, Kelly Ward says, but with the most profitable customers suddenly retreating, the siblings are now putting in extra legwork to find a higher volume of smaller businesses to work with. And while they’ve managed to increase their revenue, profitability hasn’t followed suit amid the rising cost of raw materials.
And the young manufacturer isn’t alone in working against economic headwinds. Providence Business News’ 2025 Summer Business Survey shows that companies across numerous sectors are feeling increasing concerns and uncertainties about their own business activities and the broader economy.
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CONSISTENT ASKS
The most important actions state government can take to help businesses in the coming year
are again, by a wide margin, reducing the cost of doing business in Rhode Island.
Reducing red tape for businesses was the only perennial concern to tick up slightly. Others, such as
eliminating the corporate tax, improving transportation infrastructure, providing tax incentives/credits
and supporting workforce development all either held steady or dipped slightly.[/caption]
Nearly 1 out of 5 business owners and executives – 19.6% – who responded to the biannual survey said they expected their company to perform worse in the year ahead, a dramatic increase from the 3.7% who felt that way a year ago and the highest level of gloomy outlook in the responses since the start of the Great Recession in 2008. Meanwhile, 47.7% foresee a brighter future for their business, only the fourth time in 17 years that less than half of the respondents were hopeful about the coming year.
The unprecedented unpredictability in Washington, D.C. – including ever-changing tariffs on goods and materials imported from every corner of the world – has clearly played a part in the higher level of pessimism.
A new question added to the PBN survey asked those surveyed about their company’s business prospects since the Trump administration returned to the White House in January – 44.6% said worse, 34.7% said better and 20.8% said the same.
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TARIFF WEIGHT?
Business activity improved slightly from last winter’s historical lows but is still far from
the high of summer 2017. Companies reporting improved profits dipped only slightly over the
past year, though prospects for the state economy over the next 12 months are the lowest
they’ve been since 2008, when PBN began conducting the survey.[/caption]
Lauren Slocum, CEO and president of the Central Rhode Island Chamber of Commerce, says she sees hesitancy among the Chamber’s membership across numerous industries.
“We’re seeing a lot of people aren’t stopping what they’re doing, but they’re not moving forward as aggressively as they hoped they would,” Slocum said.
“People are kind of just holding a little,” she said. “They’re still doing things. They’re trying to be optimistic. But they’re not diving in with their eyes closed.”
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COSTLY CHALLENGES
Concerns about a shortage of qualified workers appear to be easing
but a majority of respondents continue to suffer from health care angst.
Worry over government fees and bureaucracy and taxes also ticked up.[/caption]
ECONOMIC FORCES
The PBN survey, which has been conducted twice a year since 2008, is not scientific. PBN sent 22 questions to more than 1,100 businesses statewide in the newspaper’s database. One hundred seven returned the survey, a mix of businesses ranging from manufacturers to banks, construction contractors to lawyers, retailers to real estate agencies. While the respondents included some of the state’s largest employers, most were small and midsize companies.
In some ways, the latest survey results indicate that most businesses are holding their ground right now.
Three out of four respondents – 75.7% – said the amount of new business and orders they’ve experienced in the current quarter is about the same or greater than in the previous quarter, roughly mirroring the results from the previous two surveys.
At the same time, fewer (18.3%) are planning price increases in the next quarter, down from 34.3% in the winter and 21.5% a year ago.
The results also indicate that businesses are more aware than ever of not just local, but national and international forces impacting the economy, said Edward M. Mazze, Distinguished University Professor of Business Administration at the University of Rhode Island. He helped develop the survey in 2008.
In turn, they’re trying to adjust their decisions around hiring, pricing and major purchases as they consider rapidly shifting policies such as Trump-instituted tariffs and visa restrictions.
That includes orders that create “difficulty in allowing foreign students to come to universities,” and place restrictions on the relatively high percentage of immigrants who work in the hospitality industry, Mazze said.
“This could have an effect on restaurant and hotel facilities [having] enough laborers,” he said. Meanwhile, the offshore wind industry has gone through shocks, including a stop-work order on the nearly complete Revolution Wind project, which a federal judge recently overturned.
Among respondents, 29.9% said their company’s level of employment is higher now than it was in the previous quarter, an improvement from 19% six months ago and 20.8% in the summer of 2024.
But when asked if layoffs were in their company’s future plans, 78.5% answered with an outright “no,” a percentage that shrank from 84% last winter and 93% a year ago. Now, 1 in 5 respondents said they are mulling over job cuts.
Also, a greater percentage of businesses – more than 36% – said in the most recent survey that they were not planning to hire any employees in the next quarter. That number is up from 21.3% a year ago.
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LOOKING AHEAD: Christine West, co-owner and principal at Providence-based KITE Architects Inc., visits the 176-unit Summer Street Apartments, an affordable housing project designed by KITE for Crossroads Rhode Island. West is concerned about clients that rely on funding that the federal government has been cutting. PBN PHOTO/TRACY JENKINS[/caption]
Providence-based KITE Architects Inc. hasn’t seen much impact on its own bottom line yet, according to co-owner and principal Christine West. But she anticipates change is on the horizon as the firm’s clients – almost entirely nonprofits or educational and government institutions – struggle under not just tariffs but federal funding cuts.
“Our client base has usually included a range of university work, and also supportive and affordable housing,” West said. “So we’re seeing pretty serious threats to both of those types of clients.”
Higher education clients “have pulled back almost all discretionary spending,” she said, citing the cancellations of grants and research funding coupled with restrictions on international students, who usually pay the highest tuition rates.
Meanwhile, cuts to the U.S. Department of Housing and Urban Development programming are taking a toll on housing vouchers, temporary housing and other programs designed to keep families from homelessness. That’s hit some of the firm’s nonprofit clients.
With KITE’s projects tending toward a long life cycle, the architecture firm remains busy. But West says that some of the company’s peers are already hurting.
“It’s a moment of cognitive dissonance because we’re actually quite busy,” West said. “So, to see the level of intensity and stress for all our clients is alarming. It’s confusing because we haven’t really seen that slowdown yet, but we know we will.”
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PROCEED WITH CAUTION
Companies expecting to hire are at their lowest level in the last five years, though businesses
planning to purchase big-ticket items in the next quarter continue to hold steady.[/caption]
CHALLENGING TIMES
The local situation hasn’t exactly helped provide comfort, as the state grapples with structural deficits projected to reach $304 million next fiscal year and top $462 million by fiscal 2030.
Add to that the rising health care and energy costs, and the morale-killing prospect of Hasbro Inc. pulling up stakes in Pawtucket and moving its headquarters and 700 jobs to Boston when the survey was issued. [Hasbro has since announced it’s moving to Boston.]
It’s no wonder respondents were lacking confidence when asked about the Rhode Island economy as a whole.
Only 27.1% predicted either a slight or significant improvement in the state’s economy over the next 12 months, the least-optimistic response to this question in PBN’s biannual survey since the winter of 2008, when, in the throes of a historic economic downturn, 17.6% of the respondents felt the same way.
And as the economic outlook evolves, so do the challenges facing Rhode Island businesses.
In the latest PBN survey, health care costs rank as the biggest business challenge among respondents at 57.3% (up from 43.4% a year ago), while a shortage of qualified workers continues to be a problem – albeit a diminishing one – at 49.5% (down from 61.3% a year ago), tied with taxes (up from 46.2% a year ago).
At the same time, health insurance climbed to the top of the list of growing expenses (42.5%, up from 35.5% a year ago), while the salaries of new hires slipped to 28.3%, down from 35.5% a year ago, perhaps a sign of a loosening job market.
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WEATHERING IT: Susan Mocarski, Cleverhood LLC founder, says the Providence apparel company has seen import tariffs jump in recent months but hasn’t been hurt as badly as other companies.
PBN PHOTO/MICHAEL SALERNO[/caption]
For all the challenges, some degree of optimism or scrappiness is baked into the reality of being a small-business owner, says Susan Mocarski, founder of Cleverhood LLC. The Providence-based company specializes in rainwear geared toward cyclists and does much of its business internationally.
Due to Cleverhood’s niche market, the business has largely avoided the economic disruptions that have vexed other companies, Mocarski says, particularly with more people choosing alternative transportation options due to cost of living or lifestyle choices.
Still, the company hasn’t gone unscathed. Cleverhood designs products in Rhode Island but outsources its manufacturing operations to Vietnam. In recent months, import tariffs for Cleverhood jumped from 7% to 17%.
In July, manufacturing nonprofit Polaris MEP also released a survey showing that 86% of nearly 100 Rhode Island manufacturers surveyed anticipate tariffs will have negative impacts on costs of goods sold; 62% on their investment plans; and 76% on their bottom lines.
And it’s worse for other companies, Mocarski says. For those who import from China, tariffs have bounced between 40% and 60%. But Mocarski is hopeful that the strength of Cleverhood’s niche market – a large slice of its customers are in Europe – will allow the business to weather economic turbulence.
Meanwhile, bringing manufacturing operations back to the U.S. is a daunting task for many businesses, Mocarski says. In its first 10 years of existence, Cleverhood manufactured in the U.S., Mocarski said, but was stymied by a shortage of resources.
But for Cleverhood’s specialized gear, most people with the needed sewing skills have aged out of the workforce or are about to retire.
Rhode Island lacks not just a workforce with these needed skills but facilities that can support ambitious textile manufacturing.
“The mills around here are lovely and interesting, but they’re [three floors and] … the elevators don’t work,” Mocarski said. “And it’s very difficult to be competitive in this environment.”
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CONFIDENCE DIP
After expectations for their own business prospects dipped below 50% three years ago
for the first time since 2008, those numbers ticked back up over the past two years. This past summer,
however, again saw slightly less than a majority feeling hopeful about the coming year.[/caption]
PIVOT NEEDED
At Ward’s Manufacturing in Warren, it hasn’t been easy in recent months.
Along with tariffs came new supply chain woes. Where Ward’s could sometimes get its hands on needed raw materials the next day, the wait time might now be a week or more. Meanwhile, the headcount has shrunk to four employees, and although the vast majority of Ward’s customers had been domestic, the business’s international clientele has evaporated entirely.
The company’s business activity has improved compared with last quarter, but that can be deceiving.
“You might think, ‘Oh great, it’s because they’re growing,’ ” Kelly Ward said. “But it’s actually because of how terrible quarter two was.
“Even if revenue is increasing, it doesn’t mean that our profitability is increasing at the rate we had anticipated,” she added.
The Ward siblings say they have been able to take advantage of the small size of Ward’s Manufacturing, reacting quickly to unpredictable changes.
“I think that while there are disadvantages to being a small business … it is much easier for us to pivot,” Kelly Ward said. “So we were able to adapt very quickly to the tariffs. We realized right away that we need to be looking for more customers across a variety of industries.”
Correction: An earlier version of this story gave an inaccurate title for Edward M. Mazze. He is Distinguished University Professor of Business Administration at the University of Rhode Island.
More than ever, I feel RI needs to focus on the companies that operate here, show them the love. This one aspect will not only help with retention, it will go a long way for attraction to show “this is how we roll” in RI.