Businesses are hiring at pandemic-era levels as the war in Iran weighs on costs, profits, and the economic outlook.

Businesses Hire At Pandemic-Era Levels As Iran War Hurts Outlook

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Full Bio Diccon Hyatt is an experienced financial and economics reporter. He's written hundreds of articles breaking down complex financial topics in plain language, emphasizing the impact that economic currents would have on individuals' finances and the market. He has a Bachelor's degree in English from the University of Delaware.

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Published May 11, 2026

04:42 PM EDT

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Investopedia / Elizabeth Guevarra

Only 6% of businesses expanded their workforces in the last three months, a survey of business economists found.
The poll showed businesses facing rising prices and declining profits due to the impact of the Iran war.
Business leaders are feeling some of the same pessimism about the conflict that has pushed consumer sentiment to an all-time low.

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The Iran war is dragging down hiring, pushing up costs, and raising the chance of a recession, according to business leaders.

A survey published Monday by the National Association of Business Economists raised red flags about a worsening business climate on several fronts. Survey respondents pointed to conflict in the Middle East, which is pushing up fuel prices and stoking uncertainty.1 One standout figure: only 6% of companies observed higher employment at their firms in the quarter, the fewest since the third quarter of 2020, when COVID-19 was still raging.

What This Means for the Economy

While the economy has stayed resilient despite the Iran War's energy shock, business leaders see growing risks and have curtailed hiring and investment.

"The conflict in the Middle East is weighing on businesses across sectors, driving up costs, compressing profits, and cooling plans for investment and hiring, and the latest survey results reflect that shift clearly," the association said in a press release accompanying the survey.

The National Association of Business Economists polled 50 professional economists who work for private companies and trade associations.

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The survey also found that more than two-thirds of businesses had rising materials costs over the past quarter, the most since 2022; and 50% saw more than a one-in-four chance of a recession in the next year, edging up from 44% in the most recent survey in January. The businesses saying they had been negatively impacted by the war outnumbered those who hadn't, 48%-44%, and another 8% said it had a positive effect.

The deteriorating mood of business economists mirrors a sharp decline in public opinion about the health of the economy and household finances since the war began.

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