Small Business Industry Trends: Which Sectors Are Thriving and Struggling in 2026?

If you're running a small business right now, you're already aware of today's economic pressures and the small business challenges they bring. But how that pressure shows up and what you can do about it often depends less on the broader economy and more on the specific realities of your industry.

We examined data from the G&A Partners 2026 SMB Readiness Report to see what's happening on the ground by industry. What we found is a small business community that shares some common experiences but is anything but uniform. From manufacturing's mounting distress to the skilled trades' optimism, the industry-level picture reveals that where you operate matters just as much as how you operate.

Small Business Industry Trends: Data At-a-Glance

While much of what you experience as a small business owner is shared across the SMB landscape, the details — friction points, opportunities, and decisions you're faced with — can look very different depending on your industry.

Here's a closer look at SMB trends by industry and what it means for the small businesses operating within them.

Manufacturing

Manufacturing stands out as one of the more distressed sectors among SMBs right now, carrying the highest layoff rate (79%) of all industries. They're also in the top three industries delaying expansion plans at 74%.

Tariffs are driving up costs of raw materials, supply chains remain unpredictable, labor is harder to find and expensive to keep, and the capital requirements to run efficiently and stay competitive are significant. For small manufacturers, these are all factors likely contributing to layoffs and delayed growth. It also points to the margin for error being incredibly thin.

Hospitality

Hospitality is an industry that runs on momentum, and right now, that momentum is stalling. This sector had the highest delayed expansion rate (86%), suggesting growth paralysis more than outright collapse.

Persistent labor shortages, elevated food and supply costs, and a price-sensitive customer base are among the hospitality business challenges suppressing growth potential, even among business owners who worked hard to stabilize their business in recent years (post-pandemic).

Technology

Small business owners in technology, a sector built on innovation and forward momentum, are among the most worn down. More than half (55%) are showing the highest level of owner regret or fatigue of any industry — a clear sign of business owner burnout.

The rapid pace of change that defines the technology industry may be the same force depleting owners. Investments in tools, talent, and strategy that may have felt right at the time can often look different six months later, and the expectation to stay ahead of what's next can be relentless.

Skilled Trades

The skilled trades outlook is optimistic compared to other small business industry trends, with strong resistance (22%) to selling or stepping away from their businesses, compared to 50% of technology SMBs (the highest).

Many trade businesses — electricians, plumbers, contractors, and others — will always have demand, as something always needs to be built, fixed, and/or maintained. With that, the shortage of skilled labor works in their favor, making their expertise more valuable. While these SMBs are not untouched by rising costs or regulatory pressures, many of them are operating from a position of strength.

Healthcare

Healthcare small and mid-sized businesses are dealing with compliance overload, with 55% saying regulations are pulling time away from core operations. These SMBs are also the second highest (65%) in conducting layoffs.

Between evolving federal regulations, billing complexity, new technology solutions, and administrative demands of insurance and reimbursement, these SMBs are seeing the gap widen between meeting healthcare compliance challenges and efficiently running a small operation — all against the backdrop of a shrinking workforce.

Professional Services

One of the more surprising professional services industry trends this year is how closely the sector mirrors manufacturing. Despite their differences, 74% of both manufacturing and professional services firms report hesitations around expansion.

Professional services, such as law practices, accounting firms, and consultancies, don't deal with risky supply chains, raw material costs, or factory floor challenges as manufacturers do. Instead, their reluctance to expand is likely tied to client uncertainty, rising overhead, and the growing cost of attracting and retaining top talent.

Industry Insights: Common Threads

No matter what industry you're in, a few patterns and pressures are likely familiar because they're showing up across every sector.

Labor is the through line.

Whether it's manufacturers struggling to find skilled workers, hospitality operators absorbing unsustainable wage costs, or professional services firms grappling with the price of talent, a shifting workforce is one of the common threads running beneath every industry's challenges.

Compliance is a universal burden with an unequal weight.

Every small business is feeling a heightened regulatory load. But healthcare, an industry tasked with keeping private information both secure and shareable, is disproportionately impacted by it. When compliance becomes a full-time operational concern for these SMBs, it stops being a cost of doing business and starts being a threat to the business itself.

Growth paralysis is the defining condition of the moment.

Across hospitality, professional services, and other sectors, the most common action for small businesses right now is to stall. Some are surviving, some are even stabilizing, but the path to growth and expansion feels out of reach for most.

The report reveals that the challenges you may be facing as a small business owner aren't isolated — they’re structural. Pressures are widespread, and friction points are shared, meaning you're not figuring this out alone. The determination required to push through is a collective one.