A new report from Pittsburgh-based PNC found record high levels of optimism in business owners over their outlook for the next six months.
The survey of small and mid-sized businesses found that 77 percent are optimistic, a 21-year-high. Despite economist predictions for a shallow recession in early 2024, business owners said they had strong expectations for sales, profits and demand. Last year, only 49 percent felt highly optimistic, while only 60 percent were highly optimist in the spring.
“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.”
Owners surveyed said their outlook for the national, local and global economies have also improved. Nearly half (47 percent) said they were highly optimistic about the local economy, compared to 29 percent last fall. A little over a third (34 percent) said they were highly optimistic about the national economy compared to 22 percent a year ago.
However, business owners remain concerned about hiring, the survey showed. Nine in 10 employers said they would be holding steady on hiring with just 9 percent saying they plan on increased their staffing. One percent said they expected layoffs, the survey found. One in three business surveyed (35 percent) said it has become harder to hire qualified employees over the last six month. The most common reason is that there aren’t enough applicants (49 percent), their candidate lack experience or skills (22 percent), that applicants have high salary/benefit requirements (14 percent), or the applicants are not able to meet legal or security requirements (6 percent).
“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.
More than half of the owners surveyed said they were expecting to raise prices, the study found. Other findings include: one in three believe Artificial Intelligence could be beneficial to their business; one in three anticipate having to increase employee compensation; only 10 percent said they were concerned about supply chain disruptions, and two-thirds say flexible work arrangements are important to the business.