Iowa Economy - The confidence divide: Inside the widening gap between small and large businesses

The latest Principal Financial Well-Being Index shows a widening confidence gap between large and small businesses — and the divide is accelerating. Host Chris Conetzkey sits down with Principal’s Nate Schelhaas to break down why bigger companies remain relatively resilient while small and midsize firms are struggling with rising costs, tariff uncertainty, and limited pricing power. The result: Overall sentiment has dropped to one of its lowest readings in four years, driven largely by the challenges smaller firms can’t easily absorb. In this episode: • Why the confidence index fell so dramatically in just a year — with small businesses driving the decline. • Why large firms can pass on higher costs while small businesses risk damaging relationships if they try. • The national uncertainties (tariffs, inflation, rates, news cycles) weighing heavily on local confidence. • How AI adoption is becoming a competitive divider — with big companies accelerating investment. • What the data suggests about future staffing, wages, and the talent businesses will need to grow. • Why rising expenses and health care costs are squeezing smaller businesses at a much sharper rate.