Kentucky Business Leaders Steady on Economy, Continue to Cite Workforce and Housing as Top Challenges

Surveying Kentucky business and nonprofit leaders to capture their views on key economic, workforce, and public policy issues, the Kentucky Chamber partnered with local chambers, the National Association of State Chambers (NASC), and the Siena College Research Institute (SCRI) to measure how employers view current and future economic conditions and top priorities.

The survey conducted between May and July 2025 gathered responses from more than 200 business and nonprofit leaders across Kentucky representing a range of industries, including manufacturing, professional services, construction, finance, health care, and technology.

Public Policy

When asked what issues the governor and General Assembly should prioritize, employers most frequently cited workforce development (54%), personal income tax reform (47%), and affordable housing (43%). Housing availability now ranks alongside employers’ most urgent concerns, reflecting a growing recognition that affordability directly affects Kentucky’s workforce participation and business growth.

This year’s survey also asked employers whether they would expand child-care supports if paired with a state or local matching incentive. When presented with a dollar-for-dollar contribution model, 42% of Kentucky business leaders said they would be likely to offer new or enhanced child-care benefits for their employees. The findings suggest strong interest in public-private approaches to lowering child-care costs for working parents and point to an opportunity to increase employer participation through greater awareness and simplified access to existing programs such as Kentucky’s Employee Child Care Assistance Partnership, which matches employer contributions to help families access quality care.

Views on the Economy

The most pressing concerns for Kentucky companies include government regulation (51%), adverse economic conditions (48%), taxation (44%), health care costs (43%), and rising supplier costs (43%). Several challenges eased from 2024 levels, with fewer employers citing health care costs, regulation, and economic conditions as top concerns, while taxation rose slightly in priority.

Workforce shortages remain a significant barrier to growth, though conditions improved modestly from last year. Two-thirds (66%) of leaders said there is not an ample supply of trained workers, down from 78% in 2024, while 28% said sufficient talent is available, up from 16%.

Kentucky business leaders remain cautiously optimistic about the state’s economy, with 44% of employers expecting their company revenues to grow in the year ahead—nearly identical to last year’s 43%.

When asked about current economic conditions compared to last year, 33% of leaders said conditions are better (down slightly from 35% in 2024), while 29% said they are about the same. Those who said conditions are worse increased to 38%, up from 34%.

Looking ahead, 41% of employers expect economic improvement in the coming year, a slight increase from 39% in 2024. However, optimism has become more divided: 34% now expect the economy to worsen, while fewer expect conditions to remain the same.

AI Adoption

Survey results show Kentucky employers are beginning to integrate artificial intelligence (AI) into their operations, though adoption remains limited. Just 28% of respondents say they currently use AI, with higher adoption rates in financial services, retail, and professional and business services. Early adopters report clear benefits — 87% say AI has improved efficiency in their organization, with additional gains in customer outreach and business growth.

Kentucky Confidence

Business confidence in Kentucky’s long-term competitiveness remains strong. 81% of respondents said they expect their company to remain in Kentucky for the next decade—consistent with last year’s results. 80% said if they could start their business again, they would still choose Kentucky, while only 9% said they would relocate to another state.

“Understanding how employers view the economy and what’s holding back growth helps us focus on solutions that expand opportunity,” said Ashli Watts, president and CEO of the Kentucky Chamber. “This year’s results show Kentucky’s business community remains steady but realistic—optimistic about growth potential while increasingly focused on workforce shortages and the need for housing to support employees.”