What’s the Outlook for 2026?
After a year of economic uncertainty related to tariffs and persistent inflation, attendees of the 22nd Annual Economic Outlook, presented by the Chester County Economic Development Council (CCEDC), found reasons to be optimistic. The event took place last Friday at Penn State Great Valley, offering attendees insights into the economic forecast for 2026.
“The annual Economic Outlook has served as a vital resource for attendees, whether they are business leaders who need to make informed decisions or residents who want to have a clearer understanding of the economic forces shaping their daily lives,” said Mike Grigalonis, CCEDC President and COO. “If you’re running a company, managing your retirement savings, or simply trying to understand what the economy means for your household, the insights shared at this year’s Economic Outlook provide the context to move forward with confidence.”
The 22nd Economic Outlook saw the return of renowned financial experts Patti Brennan, CFP®, CFS®, CTS™, CEPA®, CES™, Founder & CEO of Key Financial, Inc., marking her 20th year participating; and Dianne P. Manges, Senior Investment Manager, Truist Institutional Wealth – Endowments. Both speakers identified reasons to be hopeful, yet also cautious for the year ahead.
“The economy is going to do well, but the markets are going to do so-so,” said Brennan. “We’re not going to see 20% returns, I don’t think this year, for several reasons. Companies are making a lot of money, but there’s a very high bar for them to exceed. So for them to continue to grow at the rate that they have been is probably not realistic.”
Manges said, “We expect an uptick in economic growth in 2026. That’s fueled from a few different sources, and one is that there’s an incredible amount of tax incentives coming through this year that will benefit both businesses and consumers.”
Manges specifically noted tax refunds in 2026 could be akin to another stimulus check for consumers, who represent the largest part of the economy. She added that “even on the business side, pro-growth tax savings are coming through that will be very favorable for businesses and the concept of capital spending.” She also noted that Federal Reserve rate cuts, wage gains outpacing inflation, and continued AI and tech-led spending will also lead to positive growth.
Brennan noted that “consumers are actually in good shape; the total net worth of the consumer in America is $197 trillion, whereas their debt level is $21 trillion.”
However, Brennan added that “student loan delinquencies have gone up, along with car loan delinquencies. The reason, she said, is that: “people are just still spending like crazy, and they’re not paying attention to their own personal finances as closely as they need to.”
On inflation, Manges said that it should level out around 3%, while wages and average hourly earnings are growing around 3.8% to reflect positive real growth for consumers.
Brennan said that while hiring has slowed down, workers should know that “their jobs are not going to be replaced by AI, but jobs are going to be replaced by someone who knows how to use AI.”
Adding additional insight on Artificial Intelligence and technology, Brennan said, “unlike the dot com era, I do not believe we are in a bubble. Mag7, those companies except Tesla, are earning net profits of a million dollars per day.”
On a local level, Brennan applauded the County’s Commissioners for being the only county in Pennsylvania not to raise taxes.