Small and mid-sized business owners nationwide are increasingly optimistic about the prospects for their own businesses and more expect to increase hiring and wages for their employees over the next six months, according to the latest PNC Economic Outlook Survey findings.
One in four (26 percent) expect to hire additional full-time employees, the most since 2012 and second highest since 2007, according to the fall findings of PNC’s biannual telephone survey. Forty-two percent, meanwhile, intend to increase employees’ pay, the most since 2007. One in four businesses (26 percent) also say they have hired in the last six months — a significant increase over the 18 percent in the spring.
This positive outlook is bolstered by a decline in pricing pressure, in part due to the sharp drop in energy prices. Twenty-eight percent plan to charge higher prices this year, down from 38 percent one year ago. For prices charged by suppliers, 50 percent expect price hikes this year compared to 62 percent last year.
“Small businesses are like the economy’s grass roots based on the employment and economic activity they create,” said PNC’s Chief Economist Stuart Hoffman. “These encouraging results demonstrate the job market will continue to grow for at least six more months and also strongly support PNC’s forecast for real GDP growth of 2.5 percent – comparing fourth quarter this year to 2014.”
Owners, however, are also finding it increasingly difficult to hire qualified workers. The survey shows that 34 percent say it has become harder to hire qualified employees than it was a year ago. One in 10 (11 percent) who are not hiring say they it is because they cannot find the right skilled workers.
Optimistic Outlook, Profitable Year
Nearly nine out of 10 (87 percent) owners are optimistic about their company’s overall prospects – an increase from 83 percent in the spring. At the same time, 76 percent are optimistic about their local economy, the highest number since 2007, and 67 percent are optimistic about the U.S. economy.
Ninety percent of business owners say they will at least break even this year, including 70 percent who believe they will make a profit. Only six percent expect a loss. Of those expecting to make a profit this year, 36 percent say they intend to invest in business operations followed by: add to cash reserves (29 percent); distribute money to owners (27 percent); and pay off debts and liabilities (25 percent).