PNC Survey Shows Business Owners Remain Optimistic Despite Economic Uncertainty

According to the latter PNC Economic Outlook According to the survey, optimism among small and medium-sized business owners remains strong, with more than half (56%) expressing confidence in the country’s economy, up from 34% last year. Additionally, 76% of respondents are very optimistic about their business prospects, while 64% expect demand to pick up over the next six months, indicating continued confidence in business growth despite broader economic uncertainty.

Gus Faucher, Chief Economist at PNC, emphasized that this positive outlook is consistent with PNC’s forecast of a soft recovery for the US economy. He emphasized that although there has been concern about the economic downturn, most business owners do not see it as a major risk as only 33% believe it will have a major impact on their business.

Key Findings of the Study

• Economic Prospects: A majority (56%) of business owners remain optimistic about the country’s economy, up from 55% in the spring and significantly higher than last year’s 34%. Optimism for the domestic economy sits at 62%, while optimism for the global economy is slightly lower at 39%.
• Business Growth: 76% of business owners are optimistic about the future of their business, a number consistent with previous surveys. In addition, 64% expect an increase in demand for their products or services in the next six months, while 41% expect to increase their inventory levels to meet this demand.
• Finance and Investments: Business owners are increasingly looking for new loans or lines of credit, with 29% planning to do so in the next six months—a survey high. Additionally, 30% of owners plan to increase capital spending, focusing on areas such as human resources, technology, and product development.
• The price is going up: A growing number of businesses (61%) plan to increase customer prices in the next six months, up from 47% in the spring. Of this, 38% expect a price increase of 5% or more, marking the highest percentage since 2010.

Challenges Facing Businesses:

• Recruitment Issues: Despite the optimism, nearly 35% of businesses report challenges in finding qualified employees. This is a return to 2023 levels after a brief improvement last spring.
• Inflation Concerns: Inflationary pressures remain a top concern, as 42% of business owners expect prices in the US to rise by 5% or more in the coming year. Many businesses report rising costs from suppliers and rising workers’ compensation as key factors impacting their performance.
• Political Uncertainty: As the 2024 Presidential Election approaches, concerns about political uncertainty are increasing. More than two-thirds (68%) of business owners expressed concern about the impact of US political uncertainty on their businesses, up from 45% six months ago.

The survey, conducted by Artemis Strategy Group, involved 500 interviews with small and medium-sized business owners and leaders from July to August 2024, providing insights into the economic outlook and key strategies for businesses across the US.