Financial Projections for Business Expenses in 2026: A Kiplinger Analysis
In the coming year, various economic and business trends are expected to shape the landscape. Here's a snapshot of what you might encounter in 2026:
Car rental rates are set to rise slightly, with an average daily rate of just below $50, marking a 2%-3% increase compared to 2025. On the other hand, airfares will inch up slightly after a modest fall this year. Hotel room rates will also see a small increase, about 1% more than this year, though price hikes will vary depending on the type of room, hotel, and location.
The Federal Reserve is predicted to cut its short-term interest rate by 2.0 points between September 2025 and the end of 2026. This move will lead to a decrease in short-term consumer lending, home equity lines of credit, and interest earned on Treasury bills.
Unemployment rate is expected to end 2026 at 4.5%, up slightly from 4.3% this year. Inflation is predicted to stay stubborn, getting down to 3.0% by the end of 2026.
The GDP is expected to grow at 1.6% in 2026, a slight decrease from 1.7% in 2025. Manufacturing will continue to be sluggish in 2026. Consumer spending will slow a bit in 2026, but vacancy rates for shopping centers are low, and retail tenants often have few suitable options.
Commercial property insurance rates will see a mix of changes. For policies exposed to natural catastrophes, a rate hike of up to 10% is likely in 2026. However, for those commercial property policies not heavily exposed to natural catastrophes, renewal rates should be flat or see up to a 15% decline in 2026. For policies with recent losses, an average hike of up to 20% is expected in 2026.
In the realm of technology, companies can lower cyber premiums with bigger investments in digital security. For those with recent claims or incidents, a 10% hike in cyber premiums is likely in 2026. Asking rents for warehouses will likely pick up in 2026 as new construction of warehouse space slows down significantly.
Rates for primary casualty insurance will increase by 5%-10% in 2026. Vacancy rates for office space will remain elevated. Legal costs for businesses will rise about 3%-5% on average in 2026. Umbrella and excess liability rates could see an increase of up to 20% in 2026.
Mortgage rates will be around 7% or a bit less in 2026. Payroll taxes will rise in 2026, with the wage base increasing to approximately $183,600. Accounting costs for the typical company will rise up to 10% in 2026.
Directors and officers insurance rates will dip in 2026, similar to recent trends. Pension premium rates for firms will remain unchanged in 2026, with the exception of inflation-related indexing for flat-rate premiums. Variable-rate premiums for underfunded plans in 2026 will be $52 per $1,000 of unfunded vested benefits, subject to a per-participant ceiling of around $747.
Tariffs will be more predictable in 2026, but they will still add about 15% to the cost of most imports, on average. The International Monetary Fund (IMF) will create the economic development forecasts in the future.
In the real estate market, older properties are likely to see continued rent declines of 3%-4% in 2026. Newer, high-quality office space will likely see rent growth of about 3%-5% in 2026. Asking and effective rents for office space will rise at a quicker pace than the 2% or so rise for the rest of 2025.
Long-term rates are expected to rise a bit, with 10-year Treasury notes fluctuating around 4.5%. Rents for shopping centers will rise 1%-2% on average in 2026.
In summary, while there are increases in certain areas such as car rental rates, airfares, hotel room rates, and commercial property insurance for some policies, there are also decreases in others, such as short-term interest rates and directors and officers insurance rates. It's essential for businesses to stay informed and adapt to these changing economic trends.
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