(ABC 6 News) – Local business owners and industry leaders in Rochester gathered to hear the latest trends and challenges facing the economy today at Tuesday’s annual Economic Summit, hosted by the Rochester Area Chamber of Commerce.
Among the panelists and presentations, local businesses say the Rochester economy that’s been growing since COVID-19 has started to slow down.
That’s according to the summit’s annual Business Outlook Survey.
Nearly half of the more than 200 businesses that responded expressed concern for the coming year, likely driven by lower than expected sales last year.
Industry experts point to a number of factors contributing to the decline in both optimism and sales.
“One obviously, the immigration issue, they need these workers,” says Bernard Baumohl, the summit’s keynote speaker and chief global economist for The Economic Outlook Group. “And the second are the higher tariffs, which is affecting their margins. And then just the general political instability, they cannot make profits. They cannot protect their margins under these circumstances.”
Immigration issues were a through-line throughout the summit, multiple speakers pointing towards the need for immigrant labor to help support the economy, particularly as U.S. fertility rate is on the decline.
“About 70% of population growth now in the U.S. is based on immigration,” says Baumohl. “It’s vital. If current policies continue on the immigration front, then we’re going to be stuck with much lower levels of growth over the course of the next couple of years.”
While the immigration crackdown has not directly impacted every business in Rochester, the fallout from it has certainly been far reaching.
January saw dozens of protests in Minnesota, including economic protests where consumers restricted their purchasing in an effort to push for change.
However, those protests have not put as much strain on larger companies, instead having a much stronger impact on locally owned businesses.
“It leaves people without work,” says Michelle Fagan, owner of Cafe Aqui in Rochester. “It leaves, smaller businesses maybe unable to pay for, necessities to run their business and potentially could cause failure. And I think it’s terrible.”
All of these factors ultimately leave businesses with some difficult decisions ahead, and it doesn’t stop there.
Experts say consumer are left with even less options, as both inflation and unemployment are predicted to rise in 2026.
This year’s midterm election is expected to significantly impact economic policy at the federal level.