PNC SURVEY SHOWS SMALL BUSINESS OWNERS OPTIMISTIC DESPITE INFLATION, RECESSION WORRIES
- About half (
49% ) of small and mid-sized business owners are highly optimistic about the near-term prospects for their own businesses. - Almost two-thirds (
63% ) are expecting to raise prices in the next six months. - Almost seven in 10 (
69% ) envision a recession in the next 12 months. - Nearly half (
47% ) of those who rely on supply chain say it remains a problem.
PITTSBURGH, Sept. 8, 2022 /PRNewswire/ -- Small and mid-size business owners and executives have an optimistic outlook about the near-term future of their businesses as they ride out inflationary pressures, supply chain disruptions and political and geopolitical uncertainties related to the national and local economies, according to the latest PNC semi-annual Economic Outlook survey.
The survey, now in its 20th year and concluded Aug. 8, showed that business leader expectations about their own companies remain strong with nearly half (
Concerns about inflation and the impact of price hikes on their businesses remain top of mind among owners and executives. Continued price increases are in the works among nearly two-thirds (
The primary rationale for price hikes has shifted from an effort to keep up with rising non-labor costs (
In addition to increasing prices for their own goods and services, seven in 10 (
Further, business owners are expressing concerns that a recession is on the horizon. Almost seven in 10 (
"This survey demonstrates that business owners see conditions as generally still solid despite concerns over high inflation. The business leaders surveyed are indicating that they are now increasing prices because they can, rather than because they have to. This reflects continued strong demand across the economy, despite higher interest rates," said PNC Chief Economist Gus Faucher.
"There has been much discussion and debate about the probability of a recession in the near-term and business owners clearly are considering this possibility," Faucher said. "While PNC views the likelihood of recession as low in the near term, we believe there is an elevated
Supply chain disruptions also continue to be a concern for business owners and have affected nearly half (
Other key survey findings include:
- Optimism Tempered: The outlook for the national and local economies has improved slightly over spring, but remains lower than last fall. More than a fifth (
22% ) are highly optimistic about the national economy while23% are pessimistic; more than one-half (54% ) are moderately optimistic. - Adjusting to Staff Shortages: Fewer business owners face staff shortages, but they are still a challenge for four in 10 (
41% vs.61% last spring) and hiring continues to be difficult for many. Businesses have found ways to adapt, such as shifting workloads. Half (49% ) have increased overtime or workloads for existing employees and a third (33% ) have relied on owners or managers to cover staff hours. One third report sourcing labor through alternative sources such as temporary or gig workers and more than two in 10 (22% ) have increased or added new technology or automation to cope. - Raises on the Rise: Four in 10 expect to increase employee compensation, up from
30% in spring. Expectations for compensation increases are highest in the manufacturing sector (53% ) compared to39% for service,36% for wholesale/retail and35% for the construction sector.
Full national and regional survey results are available at pnc.mediaroom.com.
The PNC Financial Services Group, Inc. (NYSE: PNC) is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.
Methodology
The PNC Economic Outlook survey was conducted by telephone from 7/5/2022 to 8/8/2022, 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) 370-3887
alan.aldinger@pnc.com
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SOURCE The PNC Financial Services Group, Inc.