Business Owners Remain Optimistic About Economy, According to PNC Survey
PNC’s latest semi-annual survey of small and mid-sized businesses, which concluded Aug. 6, indicates that business owner optimism remains high, lending support to PNC’s forecast of a soft landing for the U.S. economy.
KEY SURVEY FINDINGS:
Riding the Wave of Economic Optimism: A majority (56%) of business owners are highly optimistic about the national economy, inching above the 55% of last spring and up significantly from 34% a year ago. Six in 10 (62%) are optimistic about their local economy. Global economic optimism (39%) is little changed from four in 10 last spring.
No Recession Distress: Despite recession concern creeping into the economic rhetoric, only one-third (33%) of business owners think the impact of the U.S. economy on their own business is major, with the majority feeling the impact is either minor (43%) or of little or no impact (24%). There are no significant differences in the level of recession concern by region or across revenue or industry categories.
Businesses Planning to Act Based on Their Optimism: There’s a growing appetite amongst business owners for financing and new loans. A survey high 29% of business owners anticipate requesting a new loan or line of credit in the next six months. Three in 10 expect capital spending to increase in the next six months, a significant jump from last spring (21%). Top areas for planned investments or improvements are human resource practices, products/services and technology.
OTHER SURVEY FINDINGS INCLUDE:
Workforce Woes: Nearly two in 10 (18%) business owners expect to increase the number of full-time employees in the next six months. But more than a third (35%) of businesses that regularly hire employees are finding it is harder to hire qualified candidates, a return to 2023 levels following a respite last spring.
Rebounding Inflation Fears: Over four in 10 (42%) owners expect U.S. consumer prices to increase by 5% or more in the next year, a record high for the survey. Inflationary factors also dominate concerns when it comes to risks to the business for the next six months. A majority of businesses are feeling the impact of inflation in supplier prices, while nearly half are experiencing inflationary pressures from employee compensation.
Concern About Political Uncertainty on the Rise as the Election Looms: As the 2024 U.S. Presidential Election draws closer, concern about the impact on business is building. More than two-thirds (68%) of owners are at least moderately concerned about the risk U.S. political uncertainty poses to their business, up significantly from six months ago (45%).
