- 56% of small and mid-sized business owners surveyed are
optimistic about the national economy – up significantly from 34% a
year ago.
- 76% are highly optimistic about the prospects of their own
business.
- 64% of business owners expect an increase in demand in the next
six months.
PITTSBURGH, Sept. 4,
2024 /PRNewswire/ -- 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.
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.
In the latest wave of the survey, now in its 22nd
year, three-quarters (76%) are optimistic about the prospects for
their own business, consistent with the measure six months (79%)
and a year ago (77%) but remains significantly higher than the
survey's historical average optimism of 39%. And while recession
concerns have crept 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.
"These findings are consistent with PNC's forecast for continued
economic expansion through the rest of 2024 and in 2025," said PNC
Chief Economist Gus Faucher. "While
there's increased uncertainty around the economy, positive
sentiment like this demonstrates that the fundamentals remain
solid. With small- and mid-sized business owners feeling very
optimistic and the labor market remaining solid, recession concerns
in the fall of 2024 are overstated."
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.
"We're seeing businesses act based on their optimism. They're
anticipating an increase in demand, making investments and boosting
inventories, both positive signs for the economy," Faucher
said.
Nearly two-thirds (64%) of businesses expect an increase in
demand for their products or services in the next six months, up
sharply from 56% last spring and matching expectations from a year
ago. To meet demand, a survey-high of four in 10 (41%) owners
expect the level of inventory to increase in the next six
months.
The number of businesses planning to raise prices in the next
six months (61%) increased significantly from spring (47%), second
only to the survey high recorded in Spring 2018. Among businesses
expecting to increase customer prices, 38% expect to raise them by
5% or more, the highest reading since 2010.
Other findings in the survey 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%).
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
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 71/2024 to 8/6/2024, among small and
mid-sized business owners/leaders with self-reported revenue of
$100,000 to $250 million. 500 interviews were conducted
nationally. Sampling error for the nationwide results is +/- 4.4%
at the 95% confidence level. The survey was conducted by Artemis
Strategy Group (www.ArtemisSG.com), a communications strategy
research firm specializing in brand positioning and policy issues.
The women-owned firm provides communications research and
consulting to a range of public and private sector
clients.
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:
Kristen Pillitteri
(412) 762-4550
kristen.pillitteri@pnc.com
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SOURCE The PNC Financial Services Group, Inc.