- Nearly three-quarters are optimistic about U.S. economy – the most since 2005
- PNC economists forecast moderate growth amid owners’ stable outlook for sales
- Two-thirds are dissatisfied with presidential candidates’ plans for business
Owners of small and mid-sized businesses are upbeat about the U.S. economy amid steady expectations for their sales and hiring during the next six months, according to the latest PNC Economic Outlook Survey findings.
The fall findings of PNC’s biannual telephone survey, which began in 2003, reveal that 71 percent are optimistic about the national economy, the most since 2005, and up from 55 percent in the spring. Meanwhile, 77 percent are optimistic about their local economy, the highest since 2014.
Asked what term best describes their feelings about the business climate during the next six months, “hope” was chosen by 55 percent. This compares to 16 percent for “enthusiasm.” On the negative side, 11 percent chose “fear” and 4 percent picked “despair.”
Outlook: Stable Sales and Prices, Limited Hiring
Half (51 percent) expect their sales to increase during the next six months and 47 percent say profits will rise – consistent with the past two surveys.
At the same time, 22 percent expect to hire new full-time employees compared to 24 percent in the spring. Most (67 percent) will maintain the same number of full-time workers while only 8 percent will reduce staff.
“The glass for small business owners appears half full instead of half empty, but they aren’t ready to buy a round for everyone,” said Stuart Hoffman, PNC’s chief economist. “We expect to see moderate economic growth for the rest of this year with enough improvement for a federal funds rate increase at the Federal Open Market Committee’s meeting in December.”
If the survey results are a bellwether, inflation may remain in check. Price pressures have eased significantly as 37 percent expect supplier prices to increase, down from 44 percent in spring and 50 percent one year ago. One quarter (23 percent) expect to raise their own prices versus 29 percent in spring and 28 percent one year ago.