Business Valuation Trends and Economic Uncertainty in Early 2026

As of early 2026, economic uncertainty has shifted but not disappeared for businesses, investors, and valuation professionals. While the initial shock of the 2025 tariff announcements has moderated, broader macroeconomic and policy risks continue to influence growth expectations, inflation, capital markets, and overall business valuation outcomes. At Quist Valuation, we continue to monitor these developments closely and assess how evolving conditions may affect business value.

Current U.S. Economic Environment

The U.S. economy has shown greater resilience than many expected, though risks remain.

Key economic themes include:

• Economic growth remains positive
  Most forecasts project real GDP growth of approximately 2 to 3 percent in 2026, supported by consumer spending, fiscal stimulus, and improved financial conditions. While recession concerns have eased, growth is expected to moderate from recent highs.
• Inflation continues to cool, but unevenly
  Inflation has trended lower overall, reflecting easing supply constraints and tighter monetary policy. However, inflation remains above the Federal Reserve’s long-term target, with certain sectors experiencing persistent pricing pressure.
• Labor market conditions are softening
  Hiring has slowed and job growth has become more uneven across industries. While unemployment remains relatively low, the labor market is no longer as tight as in prior years.
• Consumer and business confidence has weakened
  Confidence measures have declined, reflecting concerns about inflation persistence, job security, and policy uncertainty. Confidence levels often influence spending, investment, and hiring decisions.
• Interest rates remain elevated by historical standards
  After several rate cuts in late 2025, the Federal Reserve has adopted a more cautious stance. While rates are below their recent peak, borrowing costs remain meaningfully higher than the levels seen in the prior decade.

Trade Policy and Tariff Landscape

Tariffs introduced in 2025 remain a meaningful feature of the trade environment.

Key considerations include:

• Tariffs are now a structural factor
  Rather than a temporary disruption, current tariffs should be viewed as an ongoing part of the cost and operating environment for many businesses.
• Cost and supply chain impacts persist
  Companies that rely on imported goods or operate in globally integrated industries continue to face higher input costs and added supply chain complexity.
• Policy uncertainty remains
  While fears of rapid escalation have eased, uncertainty remains regarding the duration of tariffs, potential revisions or exemptions, and how future political developments may affect trade policy.

What Remains Uncertain

Despite relative economic stability, several key unknowns continue to affect planning and valuation:

• Trade and fiscal policy direction
• Inflation persistence and future monetary policy decisions
• Confidence and demand trends
• External risks such as geopolitical events, weather disruptions, or unexpected economic shocks

These factors can materially influence assumptions used in valuation models, whether developed manually or supported by valuation software.

Implications for Business Valuations in Early 2026

At Quist Valuation, we continue to emphasize that valuations must reflect what is known or knowable as of the valuation date. As of now:

• 2024 year-end valuations would not have factored in much of the 2025 tariff shock or evolving macro conditions. These developments become increasingly relevant for 2025 and 2026 valuation dates.
• Market risk premiums, discount rates, growth assumptions, and terminal value forecasts may require updating given ongoing macro fluctuation, higher yields, and changing investor sentiment.
• Sector sensitivity matters. Businesses reliant on global supply chains or exposed to tariff effects may experience greater volatility in earnings projections and valuation multiples.

While tools such as a business valuation calculator or business valuation software can support analysis, professional judgment remains essential in applying assumptions appropriately.

Our Advice to Clients

In the current environment, we recommend that businesses take proactive steps to stay informed and prepared:

• Evaluate exposure
  Assess how tariffs, inflation, and supply chain disruptions affect costs, margins, and contractual relationships.
• Engage in scenario planning
  Develop multiple financial scenarios to understand how different economic or policy outcomes could affect performance.
• Consider interim valuations
  Interim valuations can support internal planning, financial reporting, shareholder communications, or transaction readiness.
• Maintain strong documentation
  Clear documentation of assumptions and forecasts is especially important for capital raises, equity transactions, or ownership changes.
• Monitor developments
  Stay current on economic data, policy announcements, and market conditions, and update forecasts as needed.

Looking Ahead

While economic conditions have stabilized compared to early 2025, uncertainty remains a defining feature of the current landscape. This reinforces the importance of timely, well-supported business valuations that reflect current realities rather than outdated assumptions.

At Quist Valuation, we serve as a strategic partner to our clients, helping them assess risk, adapt to changing conditions, and make informed decisions. Please do not hesitate to reach out to Shina or Parker at Quist Valuation to discuss how current economic conditions may affect your business or whether an interim valuation may be appropriate.