A Bank of America logo is seen on the entrance to a Bank of America financial center in New York City, U.S., July 11, 2023. REUTERS/Brendan McDermid

(Reuters) -A majority of small and mid-sized business owners in the U.S. expect stronger performance next year, with 74% forecasting revenue growth and nearly 60% planning to expand operations, a Bank of America survey showed.

About half the business owners surveyed by BofA believe that economies from local to global will benefit from a stabilization in tariff policy and cooling inflation. A large portion also believes supply chains will improve in 2026.

"Business owners are approaching the coming year with confidence and a clear focus on growth,” said Sharon Miller, President of Business Banking at BofA.

Small and mid-sized businesses in the U.S. were significantly affected by tariff policies in 2025, as they faced challenges such as higher costs, supply chain disruptions and slower hiring.

The survey found that three in five business owners are affected by labor shortages in a tight market, with several working more hours due to staff shortages. Only 1% of owners plan layoffs in the next 12 months, while 43% plan to hire more.

"Many plan to retain their current staff and hire more, and anticipate that local, national and global economies will improve," Miller said.

However, the survey also showed that owners remain impacted by supply chain issues, with more than half of respondents raising the price of goods and services, and by inflation, which was consistent with last year.

Separately, artificial intelligence has become essential to business owners, with 77% having integrated it into their operations in the past five years, the survey showed.

(Reporting by Pritam Biswas in Bengaluru; Editing by Tasim Zahid)