PITTSBURGH, Oct. 2, 2018 /PRNewswire/ -- Historic optimism
about the national economy from the spring (50 percent) chilled
slightly this fall (40 percent), but remains well above fall 2017
(29 percent), according to the PNC Economic Outlook, a
semiannual telephone survey of small and middle-market
business owners and executives. Four out of 10 business leaders
described their outlook for the national economy as optimistic, the
second-highest rating in the 15-year survey.
Those with a pessimistic outlook increased to 12 percent this
fall from the historic low of 8 percent in the spring. Similarly,
half (51 percent) are optimistic regarding their own businesses for
the next six months, a drop from the historic high of 58 percent in
spring 2018. Pessimism remains at a historic low of 4 percent.
"Optimism for small and mid-sized business owners about the
national economy, their local economies, and their own companies
remains near record highs, although it has slipped slightly since
the spring, according to our fall 2018 survey," said Gus Faucher, chief economist of The PNC
Financial Services Group, Inc. "Hiring expectations also are near a
record high, as we continue to witness the second-longest economic
expansion in U.S. history."
Nearly two-thirds (64 percent) of business leaders expect
increased sales, dropping marginally from spring 2018 (69 percent).
Expectations for increased profits are the second-highest on record
(59 percent), only outpaced in spring 2018 (64 percent). Businesses
anticipating a decrease in profits remains at a historic low (6
percent).
Key survey findings include:
Price Check: The number of business leaders forecasting
rising prices in the next six months gained momentum. More than
half (53 percent vs. 41 percent in spring 2018) anticipate
suppliers charging more; 45 percent (vs. 29 percent in spring
2018) plan to charge their customers more. Of those planning to
raise the prices they charge customers, (45 percent) anticipate a
one- to two-percent hike, while 25 percent anticipate a 5 percent
or more increase. Increasing business, favorable market conditions
and rising labor costs are among the key drivers of higher pricing.
Only 3 percent of businesses anticipate lowering prices.
Waging Workers: Small and mid-size business leaders
expect wages and hiring to remain near the record highs reported in
spring 2018. 46 percent expect to increase wages (vs. 49
percent in spring 2018), while the number planning to decrease
workers' wages remains at a survey low of 2 percent.
Bonus Round: With the labor market continuing to tighten,
eight in 10 (82 percent) business leaders across all industry
sectors say they already have taken one or more actions to retain
existing or to attract new employees: increasing wages/salaries (44
percent), offering or increasing bonuses (24 percent), and boosting
benefits (24 percent). Over one in four (28 percent) have allowed
more flexible work arrangements and one in 10 have relaxed hiring
standards.
The Three Faces of Tariffs: Four out of 10 (41 percent)
respondents report currently selling items or services to or buying
items or services from other countries to some extent. The
percentages are significantly higher for manufacturers (59 percent)
and wholesalers/retailers (47 percent). However, only 8 percent of
all respondents characterize the volume of that trade as "large."
When asked to choose sides on increasing U.S. tariffs on other
countries' goods based upon what's best for their own business, 41
percent are in support (33 percent in spring 2017) and 31 percent
are opposed (32 percent in spring 2017); more than a quarter of
business leaders (27 percent) are uncertain.
As a result, four out of 10 anticipate paying higher prices to
suppliers. Three out of 10 business leaders (31 percent) expect to
increase the prices they charge their customers should the United States impose increased tariffs on
other countries' goods, but nearly half (47 percent) expect no
impact. Nearly half of business leaders (48 percent) do not expect
any impact on company sales, with 18 percent anticipating increased
sales. Only 8 percent forecast decreased sales as a result of
increased U.S. tariffs on goods from other countries.
Taxed Out: Familiarity with the impact of the federal Tax
Cuts and Jobs Act of 2017 on business increased slightly to 32
percent (vs. 27 percent in spring 2018); 35 percent are familiar
with the new tax law, but uncertain how it will affect their
business, dropping from 45 percent in spring 2018. Significantly
fewer business leaders (34 percent) view the potential impact to
their bottom line as positive (43 percent in spring 2018 ). A third
(32 percent) still believe it is too early to tell or simply do not
know. 75 percent of business leaders have not made or do not expect
to make any changes to their businesses as a result of tax reform,
jumping from 61 percent in spring 2018.
A digital package containing national and regional survey
results is available at http://pnc.mediaroom.com/digital-packages.
The PNC Financial Services Group, Inc. (NYSE: 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 7/9/2018 to
9/13/2018, among small and mid-sized businesses. 503
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 firm, headquartered in
Washington D.C., 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:
Amy Vargo
(412) 762-1535
amy.vargo@pnc.com
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SOURCE PNC Financial Services Group