Businesses Bullish on Economy, PNC Survey Finds
PITTSBURGH – The PNC spring survey of small and mid-sized businesses finds that owners are the most optimistic about the prospects for their own businesses and the U.S. economy than they have been in 15 years.
The chief economist of PNC Financial Services Group Inc., Guy Faucher, reports that more than three in five businesses, or 62%, “anticipate sales increases in the next six months, the highest since spring 2007.”
In Ohio, PNC economist Mekael Teshome says, half of the small and mid-sized businesses surveyed expect to see their profits increase and nearly three in 10, or 28%, expect to add full-time employees to their workforces.
Business owners are the most optimistic about their own prospects – 94% — and the health of the Ohio and national economies, 88% and 89% respectively, since PNC began its own semi-annual surveys in 2009. They are buoyed by the Trump Administration’s statements about lowering taxes, providing regulatory relief and repealing the Affordable Care Act, the PNC economics department found.
Among Ohio business owners, “The view on the new administration is mixed,” Teshome writes. Some 37% expect the policies of the Trump Administration and Congress “in general to have a positive impact on their businesses this year.” Thirty-four percent say it’s too early to tell and 14% say that what the federal policies will have no effect. “Only 11% anticipate a negative impact,” Teshome writes.
Nearly a quarter of Ohio business owners in the survey said federal and state regulations hurt them, the remainder were “relatively neutral.”
Nationally, 32% said federal regulations hurt their companies’ ability to compete while 31% said state regulations have a negative effect.
As well as their enterprises are doing and their optimism about the economy, demand for credit is relatively weak, PNC reports.
Across the PNC footprint, only 10% said they’ll borrow to support plans for growth while 54% said they’ll use internal funds. A quarter, 25%, said they’ll both borrow and use internal funds while 11% said they didn’t know.
In Ohio, 21% said they’ll borrow to finance growth while 42% said they intend to fund expansion on their own. Thirty percent said they would pay for it both by borrowing and internal sources while 8% said they didn’t know.
Based on the survey and their other research, the PNC economics department said, “The fundamentals are solid for the U.S. economy” despite weaker than expected first-quarter growth, 0.7%. The department expects growth to pick up and that the Federal Open Markets Committee is likely to raise the federal funds rate by a quarter point when that body meets in June and December.
Copyright 2023 The Business Journal, Youngstown, Ohio.