This article answers:
- What economic signals matter more than GDP headlines for regional ecosystems?
- How are small businesses responding to today’s economic pressure?
- What should ecosystem leaders do differently in a discipline-focused economic environment?
- How can ecosystem leaders tell when conditions are starting to shift?
The economy looks different from inside a business than it does from a headline. That gap between what macroeconomic data reports and what business owners are experiencing was the starting point for EcoMap’s latest Ecosystem Talks webinar.
TL;DR: The economy is expanding on paper, but small businesses are operating with shrinking margins, more cautious hiring, and less room for error. Applied economist Matthew Salois, who works directly with more than 2,300 businesses, explains why headline data misses most of what owners are experiencing and what ecosystem leaders should be tracking instead. The practical takeaway is to build two dashboards, one for growth and one for durability, and to start measuring survival rates and productivity alongside startup counts.
Is This a Crisis Economy or Something Else?
Salois opened by naming the tension many ecosystem leaders are navigating. The economy is technically expanding, but the day-to-day operating environment feels tighter for many business owners.
“GDP won’t capture what’s happening within profitability or margin pressure that a lot of businesses are feeling,” he said. “Everything feels harder right now and has for the last few years.”
Inflation has cooled, but cost stress has not disappeared for small business customers and clients. Capital is more selective. Hiring decisions are more deliberate. Salois described the current moment as a recalibrating economy rather than a crisis, and that framing matters for how ecosystem leaders interpret what they’re seeing on the ground.
“The real risk isn’t necessarily a recession,” Salois said. “It’s misreading a disciplined growth cycle as temporary and failing to plan for what comes next.”
What’s the Difference Between a Cycle and a Structural Shift?
One of the more useful frameworks Salois offered was distinguishing between cyclical trends and structural shifts. He compared it to walking a dog on a long leash through Central Park. The dog darts toward every squirrel and jogger, but the destination stays the same. Cycles pull in different directions while structural trends move the economy toward a longer-term outcome.
The challenge is that businesses made decisions during the post-COVID boom, thinking that cycle was a new structural reality. When it wasn’t, the consequences showed up in layoffs at large companies and tighter margins at smaller ones.
For ecosystem leaders, this distinction carries real weight. Misdiagnosing a cyclical correction as permanent decline can lead to pulling back at the wrong moment. Misreading a structural shift as a passing phase means missing the need to adapt.
“When capital is abundant and demand is robust, even imperfect systems can generate growth,” Salois said. “But stimulus has faded, borrowing costs are normalizing, and now those inefficiencies are becoming much more visible.”
What Are Economists Missing About the Small Business Experience?
Salois was direct about the limits of headline data. GDP growth doesn’t capture how difficult it was to generate that output. Unemployment rates don’t surface the productivity gaps that businesses are quietly managing.
“A business can report the same revenue as last year, but if payroll costs are higher, interest on credit lines is moving upward, and suppliers are raising prices, take-home profit shrinks,” he said. “That margin is the cushion that determines whether leaders feel confident enough to hire, invest, or expand.”
Beyond margin pressure, Salois pointed to decision fatigue as something economists rarely capture. After years of volatility, many business owners are more cautious about irreversible commitments, from capital purchases to new hires to opening additional locations. None of those individual decisions look dramatic in a report, but the aggregate effect meaningfully slows regional growth.
“The conversation I hear most is, ‘We’re still operating, but the room for error is a lot smaller,'” Salois said. “That’s not a headline statistic. It’s a behavioral reality.”
What Economic Signals Should Ecosystem Leaders Watch Before the Data Confirms It?
Davis asked Salois to name the signals ecosystem leaders should track to get ahead of changing conditions. Salois pointed to hiring hesitation as one of the earliest and most underread indicators.
Layoffs make headlines, but they’re a lagging signal, appearing after pressure has already built for some time. Hiring hesitation happens earlier and more quietly. When businesses feel confident, they hire ahead of demand. When confidence moderates, they start asking whether they can manage the current team a little longer or whether productivity improvements can substitute for adding headcount.
“If job postings decline or open positions remain unfilled longer than usual, that often reflects caution, not collapse,” Salois said. “Hiring hesitation tells you confidence is moderating before the unemployment numbers confirm it.”
How Should Ecosystem Leaders Respond to a K-Shaped Economy?
The conversation moved to the K-shaped economy, a concept describing how the economic recovery has diverged sharply. Asset prices and balance sheets have trended upward, while everyday lived experiences for many households have stagnated or declined in real terms.
For most of the businesses and entrepreneurs that ecosystem leaders support, Salois noted, the lived experience is on the diverging line, not the upward one.
“Even if the markets feel fine, the typical household is feeling squeezed by higher prices, especially for essentials, stagnant real wage growth, and rising debt service levels,” he said.
Salois offered three things ecosystem leaders can encourage the businesses they support to do. First, reinforce trust and communication with customers, because businesses that clearly communicate value retain relationships when budgets tighten. Second, demonstrate the value behind any price increases rather than simply raising prices without explanation. Third, offer payment options or pathways that work within customers’ budgets and soften the impact of higher costs.
How Can Ecosystem Leaders Balance Growth Goals With the Current Need for Resilience?
One of the more direct questions in the conversation was how ecosystem leaders can keep growing their regions when so much attention has shifted to survival rates and business durability. Salois pushed back on the idea that resilience and growth are in tension.
“If we’re building new businesses but they’re failing by year two or year three, we have a massively sinking ship,” he said. “That growth has to be sustainable.”
He suggested that the reflex to equate speed with success needs to shift in a margin-sensitive environment. The question for ecosystem leaders shouldn’t just be how many businesses were launched this quarter, but how many strengthened their operating capacity, improved productivity, or grew profitability.
A chamber of commerce that typically runs programs focused on scaling quickly might also consider offering workshops on cash flow management, cost control, and operational optimization. Those programs may be less visible than a ribbon cutting, but they’re highly relevant to where businesses are right now.
What Should Ecosystem Leaders Measure That They Probably Aren’t?
Salois closed with a direct recommendation. Add a durability dashboard alongside the growth dashboard.
In high-growth periods, tracking startup counts, ribbon cuttings, and square footage developed makes sense. Those are visible indicators of momentum. In a discipline-focused environment, the more important question is how strong the existing businesses already are.
“I would immediately implement something like a regional durability dashboard,” Salois said. “Something that tracks survival rates, profitability health, and productivity improvements alongside how many firms are launching.”
He also recommended structured listening sessions with business owners, not just surveys, but longer conversations about hiring hesitation, financing behavior, and operational friction.
“That qualitative insight will surface turning points in your region before the macro data even confirms it,” he said.
About the Speaker
Matthew Salois is an applied economist and organizational leader focused on helping small businesses thrive amid economic change. He serves as President of Veterinary Management Groups, where he leads economic, strategic, and leadership initiatives supporting more than 2,300 independently owned businesses across the U.S. His work centers on improving productivity, strengthening leadership capacity, and helping owner-operators translate economic signals into practical, growth-oriented decisions.
Frequently Asked Questions
- What economic signals matter most for regional ecosystems in 2026?
-
Hiring hesitation is one of the most predictive early indicators. When businesses stop posting jobs or leave positions unfilled longer than usual, it signals a shift in confidence before unemployment data moves. Margin pressure, pricing power, and cash flow patterns inside operating businesses also tell a more accurate story than GDP headlines or unemployment rates, which tend to lag behind what’s happening on the ground.
- How are small businesses responding to economic pressure right now?
-
Most businesses are holding steady or delaying growth rather than collapsing. The most common experience is a tighter operating environment with less room for error, driven by higher input costs, more selective capital access, and cautious hiring. Decisions that used to happen quickly, like opening a new location or filling an open role, are now made more deliberately. The aggregate effect of that caution meaningfully slows regional growth even when individual businesses look stable.
- Should ecosystem leaders focus on growth or resilience in 2026?
-
Growth and resilience aren’t in opposition. The measure that matters is whether the growth being generated is built to last. Businesses that launch without operational durability become a liability for the region over time. Ecosystem leaders should track survival rates, profitability health, and productivity improvements alongside startup counts and ribbon cuttings.
- What is the K-shaped economy, and why does it matter for ecosystem builders?
-
The K-shaped economy describes the divergence between those whose financial position has improved since the pandemic recovery and those whose lived experience has stagnated or declined. Asset prices and market performance have trended upward, while real wages, purchasing power, and household confidence have remained flat or worsened for many. For ecosystem builders, this matters because most of the entrepreneurs and small businesses they support are living on the lower leg of that K, not the upper one, even when headline data looks healthy.
- What is a durability dashboard, and how do ecosystem leaders build one?
-
A durability dashboard tracks business health indicators beyond launch and expansion metrics. It includes survival rates at one, two, and three years, profitability and margin trends where accessible, productivity improvements, and hiring behavior over time. It complements a growth dashboard rather than replacing it, giving ecosystem leaders a more complete picture of whether their region’s economic base is strengthening or just expanding. Qualitative listening sessions with business owners add context that data alone won’t surface.