Businesses Raring to Grow, If They Can Find Skilled Workers, JPMorgan Chase Survey Finds
22 February 2018 - 12:01AM
Business Wire
The new tax law and recent regulatory reform
boost expectations
American business owners are feeling better than they have in
years, thanks in part to recent regulatory reform, corporate tax
cuts and a steadily improving economy. But they’re getting nervous
about finding the skilled workers they need to grow as their older
workers retire, according to the annual JPMorgan Chase Business
Leaders Outlook report released today.
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U.S. businesses are feeling more
optimistic than they have in years. (Photo: Business Wire)
“This trending positivity is confirmation that something real is
happening in the economy,” said Jim Glassman, senior economist at
JPMorgan Chase. “Business optimism translates to business activity,
which is why we’re seeing increased expectations across the board.
For businesses that can hire and retain talent in today’s tight
labor market, there are growth opportunities to capitalize on.”
Businesses of all sizes are concerned about the supply of
qualified candidates: 45% of midsize business executives are
extremely or very concerned about it, as are 31% of small business
executives.
Among midsize businesses, optimism is up across the board, year
over year:
- 69% are optimistic about the global
economy, more than double last year’s sentiment and the highest
since the survey began eight years ago
- 89% are optimistic about the
national economy, up 9 points vs. last year
- 75% are optimistic about their local
economy, up 7 points vs. last year
Among small businesses, optimism for the global and local
economy is the highest it’s been in several years:
- 51% are optimistic about the global
economy, up 10 points vs. last year
- 63% are optimistic about the
national economy, consistent with last year
- 60% are optimistic about their local
economy, up 5 points vs. last year
The new tax law is front and center for midsize businesses, with
most (91%) expecting it to help their business. Only 37% of small
businesses expect it to positively impact their business’s bottom
line while almost an equal number expect no impact (30%).
With their tax savings, midsize businesses indicate they
plan to:
- Pay down debt: 44%
- Invest in capital expenditures:
43%
- Increase wages: 33%
When it comes to hiring and pay, midsize
businesses indicate they are also more likely to boost
spending:
- Increase hiring of full-time personnel:
64%, up 7 points vs. last year
- Boost compensation: 76%, up 5 points
vs. last year
Small businesses, meanwhile, indicate they are more likely to
hold the line:
- No changes to full-time personnel: 65%,
consistent with last year
- No change in compensation: 56%,
consistent with last year
What midsize businesses are thinking about business
expectations and challenges:
- They expect to increase sales (82%),
profits (75%), capital expenditures (42%) and credit needs (30%),
all up year over year
- Their top challenges for 2018 are:
- Increasing sales: 63%, down 8 points
vs. last year
- Limited supply of talent: 54%, up 10
points vs. last year and increasing every year since 2014
- Managing labor costs: 50%, up 4 points
vs. last year
- The most common reasons for the talent
shortage are a lack of applicants (52%), unique skills needed (50%)
and applicants’ work ethic (39%)
What small businesses are thinking about business
expectations and challenges:
- Many expect an increase in sales (62%)
and profits (59%)
- Their top challenges for 2018 are:
- Increasing sales: 54%, up 16 points vs.
last year
- Taxes: 28%, consistent with last
year
- Uncertainty of economic conditions:
27%, down 7 points vs. last year
- Likely reflecting recent tax reform,
fewer small business executives would select lowering taxes as a
top area for the government to focus this year: down seven points
from last year and 11 points from 2016. Proposed focus areas
growing this year: Create and foster a skilled workforce (23%) and
improving infrastructure (36%) are all up vs. last year.
For more information on the survey, visit
jpmorganchase.com/businessleadersoutlook.
Survey Methodology
The 2018 JPMorgan Chase Business Leaders Outlook survey was
conducted online in January 2018 with 1,685 executives of midsize
companies (annual revenue of $20 million to $500 million) and 955
small business leaders ($100,000 to $20 million) in the United
States. The results are within statistical parameters for validity,
and the error rate is +/- 2.5% at a 95% confidence interval.
About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading global
financial services firm with assets of $2.5 trillion and operations
worldwide. The Firm is a leader in investment banking, financial
services for consumers and small businesses, commercial banking,
financial transaction processing, and asset management. A component
of the Dow Jones Industrial Average, JPMorgan Chase & Co.
serves millions of customers in the United States and many of the
world's most prominent corporate, institutional and government
clients under its J.P. Morgan and Chase brands. Information about
JPMorgan Chase & Co. is available at www.jpmorganchase.com.
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JPMorgan Chase & Co.Janet Yoojanet.h.yoo@chase.comorAshley
Frostashley.c.frost@chase.com
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