Local Business Leaders Are Still Optimistic. It’s Housing That’s Keeping Them Up.
Four times a year, a number comes out of a building on the MTSU campus that tells you what the people who sign the paychecks around here are actually thinking. This quarter it says something unusual: Middle Tennessee's business leaders are still optimistic, and the rest of the country's are not.
The Middle Tennessee Business Confidence Index registered 57.2 for the second quarter of 2026. That is down 2.9 points from 60.1 in the first quarter — but it sits comfortably above 50, the line that separates net-positive sentiment from net-negative on the index's 0-to-100 scale.
The national picture went the other way, and not gently. The Conference Board's measure of CEO confidence slid from 59 in the first quarter to 47 — through the neutral line and out the other side. That leaves Middle Tennessee running just over ten points ahead of the national mood. The two surveys ask different questions of different people, so the comparison is context rather than a like-for-like scoreboard. It is still a striking gap.
Confident about today, less sure about tomorrow
Underneath the headline number, the panel is noticeably happier about the present than the future. The Current Conditions Index came in at 65.6. Future Expectations trailed at 58.1.
The strongest single component was sales expectations at 69.3, followed by current business conditions at 68.8 and profitability expectations at 64.8. The weak ones are where it gets interesting: tax and regulatory policy came in at 42, the weakest component on the board, and confidence in the U.S. economy as a whole sat below neutral at 47.2.
Read together, that is a portrait of businesses that like their own order books and distrust the environment they are operating in. They think they will sell things. They are less sure anyone is going to make it easy.
What is actually worrying them is housing
This is the part that ought to land hardest in a city growing as fast as this one.
The index's Housing Cost Concern reading fell to 38.4 — the most pronounced local concern in the survey. More than half of valid respondents, 55.8%, said they were very or extremely concerned that local housing costs are affecting their workforce. That is employers saying the price of a place to live is starting to determine who they can hire.
Permitting is the second pressure point. The zoning and permitting diagnostic slipped to 55.8, with 46.5% of respondents reporting some or significant operational effect. The infrastructure diagnostic held comparatively steady at 56.4 — a reasonably good showing for a region currently rebuilding a great deal of its road network at once.
When the panel was allowed to answer in its own words, the recurring themes were customer demand and competition, economic and political uncertainty, housing and workforce pressure, rising operating costs, interest rates, and zoning or permitting constraints. Asked what they wanted done about it, they most often named tax or property-assessment relief, housing affordability, and permitting or regulatory reform.
Where the number comes from
The index is built from the quarterly Middle Tennessee CEO Panel and produced by MTSU's Business and Economic Research Center in partnership with the Nashville Area Chamber of Commerce. This quarter's reading rests on 44 unique panel responses — a small, deliberately senior sample rather than a broad consumer poll. Infrastructure, housing costs and zoning or permitting are tracked and reported separately from the core index.
The center's director, Murat Arik, characterized the quarter as more cautious than the one before it while noting the index still points to net-positive sentiment, and drew attention to the contrast with the national decline alongside mounting pressure from housing costs, permitting and policy uncertainty.
None of which happens in a vacuum. The same region whose employers are flagging permitting friction and housing costs is the one about to spend years living with the I-24 Choice Lanes project and its fifty-year operating agreement, and the one where the mayor has been fielding questions about roads and growth all year. Housing affordability is showing up in the survey data for the same reason it shows up at council meetings.
The full index is published at MTBCI.org.
