PNC Survey Shows Business Owner Optimism Soars To 21-Year Record High While Hiring Concerns Linger
- 77% of small and mid-sized business owners are optimistic about future growth, indicating positive sentiment in the market.
- This high level of optimism could potentially lead to increased investment and expansion in the small business sector.
- None.
77% of surveyed small and mid-sized business owners optimistic about their business- Despite economist expectations for recession, elevated optimism for national economy
- Almost half of respondents say there aren't enough applicants for open positions
Despite PNC economists' predictions for a shallow recession starting in early 2024, business leaders' outlook about their own companies has risen sharply this fall, with over three-quarters (
In addition, owners' outlooks for the national, local and global economies have also improved significantly. Almost half (
Also, profit and demand expectations are higher with
"While the large spike in optimism among these business owners is a surprise, it can be attributed in part to the resilience that they demonstrated during the challenging years they have faced since the pandemic began," PNC Chief Economist Gus Faucher said. "Business owners who survived that demanding time are confident in their ability to run their businesses and focus on what they can control versus what they can't."
Hiring remains a challenge, however. Nine in 10 employers say they intend to hold steady on hiring with just
"It is interesting to note that while hiring is a concern of business owners, half of employers have seen an increase in employee enthusiasm for their work over the past year. This means the people they already have are clearly engaged," Faucher said.
As inflation has eased over the last year, so have owners' expectations on raising prices. More than half (
Main justifications for increasing customer prices have shifted somewhat. Favorable market conditions top the list (
Fewer expect their price increases to be
The steady drumbeat of Federal Reserve rate hikes over the past year has caught the attention of business owners. Two-thirds (
Other findings in the survey include:
- Seeking Artificial Intelligence: One in three business owners (
33% ) believe Artificial Intelligence (AI) applications could be useful to their business. AI relevance is highest for manufacturing businesses (47% ). Among those who consider AI useful, more than four in 10 (44% ) are already using AI applications, while45% are evaluating or planning to implement applications in the next year or two. - Employee Strategies: One in three business owners (
33% ) expect to increase employee compensation, up from24% in the spring but fewer than last fall (40% ). More than four in 10 employers (43% ) report increased compensation requirements among their workforce and38% say the need for flexible hours or remote work has increased. Employers are taking a variety of measures to attract and retain employees:35% have standardized flexible work options;27% have changed benefit packages and23% have standardized their hiring, promotion or compensation practices. - Flexibility Remains Top of Mind: Two-thirds (
67% ) of employers say flexible work arrangements are important to the business. Among those who have standardized flexible work options and consider flexible work arrangements important to their business,60% say it helps attract and retain employees and38% believe their policies enhance the reputation of the business. - Supply Chain Concerns Abate: Business leaders' top concern for their business in the next six months has shifted from supply chain disruptions to costs. Nearly a quarter (
23% ) are most concerned about the cost of materials, up from9% last fall, while14% are most concerned about labor costs, up from4% last fall. The portion worried about supply chain disruptions dropped to10% from25% last fall. More than four in 10 (43% ) of construction firms say material costs are their top concern.
Full national and regional survey results are available at pnc.mediaroom.com.
The PNC Financial Services Group, Inc. (NYSE: PNC). PNC is one of the largest diversified financial services institutions in
Methodology
The PNC Economic Outlook survey was conducted by telephone from 7/5/2023 to 8/9/2023, among small and mid-sized businesses with self-reported revenue of
DISCLAIMER: This report was prepared for general information purposes only and is not intended as specific advice or recommendations. Any reliance upon this information is solely and exclusively at your own risk. NOTE: The sum of percentages may not add to the total due to rounding.
CONTACT:
Alan Aldinger
(412) 768-3711
alan.aldinger@pnc.com
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SOURCE The PNC Financial Services Group, Inc.
FAQ
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