In a mix of pessimism and optimism, a new survey from Provident Bank has found that more than two-thirds of small- to medium-sized businesses believe a recession is likely for 2023, but nearly three-quarters of those businesses feel their company will be in better shape to withstand it.
The bank, which has branches in Pennsylvania, polled 1,000 small-to-medium-sized business owners and executives and found that 67 percent believe the United States is likely to enter a recession this year. Among the top reasons were the COVID-19 pandemic (27 percent), inflation (23 percent), and the current administration (14 percent).
Survey respondents said the biggest challenges facing their businesses were inflation (16 percent), supply chain related delays (13 percent), rising wages (12 percent), trouble attracting and retaining talent (11 percent), and economic fallout from the pandemic (9 percent); while the challenges facing the nation’s leaders were inflation (57 percent), climate change (37 percent) and crime (28 percent).
The possibility of a recession also changed depending on the country’s area. Only 59 percent of respondents from the Northeast believe a recession is likely, compared to 72 percent of respondents from the Midwest, the survey found.
“As bankers, it’s incumbent on us to help our customers prepare for a possible downturn in the economy,” Provident President and CEO Anthony Labozzetta said. “It’s also essential for businesses to know that they can rely on their bank for trusted advice and solutions on how to best navigate a potentially challenging economy.”
However, despite those challenges, 78 percent of the surveyed business owners and executives said they felt their businesses would be in “better” or in “much better shape” in the coming year. Additionally, 68 percent said they anticipated increasing their hiring due to sales growth (17 percent), reasonable labor costs (15 percent), and additionally skilled staff (14 percent).