A sharp drop in optimism among businesses due largely to uncertainties created by Trump administration policies is among the key findings of an annual Southeast Alaska Business Climate Report released last month.

“Last year we had one with the second-highest levels of positivity and now we have one with the second-lowest levels of positivity,” Meilani Schijvens, owner of Rain Coast Data, said in an interview about the report she has published every year since 2010.

Separate from concerns over the national economy and political actions that affect businesses, a shortage of housing continues to plague Southeast.

“An overwhelming majority (79%) of employers indicate that housing issues directly cause employee turnover or deter potential hires from moving to the region,” the report said. “Housing pressures are intertwined with broader cost-of-living concerns, including child care affordability, further complicating labor attraction and retention in Southeast Alaska.”

The same issues were raised by a nonprofit in Wrangell that responded to the survey. “Wrangell’s population is declining. This can be directly attributed to the lack of affordable housing, lack of affordable child care, and lack of consistent ferry service in Southeast. There are jobs, but they do not pay enough to enable families to live in Wrangell.”

A tourism business in the community offered a more optimistic comment: “With more cruise ships scheduled to make port in Wrangell over the next two years, we anticipate growth as long as local workforce can fill the seasonal positions we need to operate at higher capacity.”

A total of 422 Southeast Alaska business owners and top managers, representing a combined staff of about 11,600 workers, responded to this year’s survey in April.

More than 60 Wrangell business owners and managers answered the survey, second only to Juneau, with 115. More than twice as many people in Wrangell than from Petersburg participated in the survey.

Gustavus moved into last place in this year’s survey, with 72% reporting a negative view of the business climate. Wrangell was the second most gloomy, at 60%.

Sitka topped the list with 85% reporting a good or very good outlook for the business climate.

Nearly half of the Southeast businesses surveyed — 47% — stated they anticipate negative effects from U.S. tariffs, mass cuts to federal employees and programs, and other policies being implemented by President Donald Trump since he began his second term in January. Many reported they are already experiencing disruptions.

At the same time — and proof that numbers can be used to argue differing viewpoints — “most businesses remain generally optimistic,” Schijvens’ report notes.

“In 2025, 63% of businesses hold a positive economic outlook, while 37% have a negative outlook,” the report states.

However, those figures represent a large drop from two years ago when 79% of respondents were positive about their business outlook, according to Schijvens.

The study includes 285 comments from business owners and managers, with a high percentage citing the turmoil associated with Trump’s return to office as the cause of their concerns.

“That’s one thing that we’re really seeing very strongly in the study is that there is just so much uncertainty,” she said. “We’ve seen a just dramatic shift to the economy of Southeast Alaska just in the last several months, or at least how our business leaders are thinking about the direction the economy’s headed.”

Also, while more businesses are feeling positive than negative, there are indicators of a downturn ahead, Schijvens said.

“One thing that I found was absolutely fascinating is that there’s more businesses that are planning on downsizing and reducing jobs than businesses that are planning to add jobs,” she said. “And that’s a question that we only started asking in 2019 so we don’t have a lot of data on it, but the only other year that happened in that seven-year period was 2020,” at the onset of the COVID-19 pandemic.

Among the comments highlighted in the study was one from a Skagway business: “Our Canadian visitors are already down around 80% of normal. We are also concerned about the cruise ship passengers spending less per visit due to economic uncertainty. We postponed a large employee housing complex addition and an expansion of one of our restaurants due to the uncertainty.”

No industry is immune from the uncertainty over whether tariffs will help or hurt the economy, and by how much, according to the survey results. A Wrangell business offered: “The salmon/seafood market is still very volatile, especially with the unknown effects of tariffs.”

A Ketchikan business also expressed worry about tariffs: “I am very concerned about tariffs raising the cost of construction materials. Construction is already extremely expensive in our area and a lack of contractor confidence in pricing stability is going to raise bid pricing. Uncertainty is bad for business.”

Mining and Alaska Native organizations were the most optimistic about “the overall business climate now” in Schijvens’ study, with 100% of respondents in each stating they feel good about their situations.

The timber industry, however, was at the bottom of 20 industry groups, with 40% of survey responders answering that the business climate was poor and 40% saying it is very poor.

Timber — already in a decades-long downtown — appears to be struggling even more as tariffs are adding unpredictability to finding overseas buyers for logs.

“If there’s going to be these sky-high tariffs (and) there’s so much uncertainty around what the tariffs are going to be, that’s another industry that really relies on trade to be successful,” she said.