PNC: Small Business Owners Expect More Sales, Spending, Hiring
An upbeat outlook on sales will prompt nearly one in three U.S. small business owners to add employees over the next six months as their optimism returns to positive levels unseen since before the ‘Great Recession’ of 2008-2009, according to the PNC Economic Outlook survey’s newest findings.
The spring findings of PNC’s biannual survey, which began in 2003, show expectations for sales and profits have rebounded from near-historic lows last fall and that owners have growing optimism about the U.S. economy, and their own company’s prospects. Nearly three in four (70%) plan to invest in their business in the next six months.
Despite the good news, inflation expectations remain elevated, as two in five owners (40%) plan to raise their selling prices, while only 7% intend to cut prices, indicating a significant rise in pricing pressures. Two-thirds (69%) plan to increase prices by more than 2%, which is Federal Reserve’s inflation “goal.”
“With the start of the baseball season, the economic recovery is on base, but heading home, but rising energy prices, elevated unemployment and a recession in Europe could still prevent it from scoring the winning run,” said Stuart Hoffman, chief economist at PNC. “These findings show a significant improvement in business expectations and optimism, and thus strongly support PNC’s baseline forecast that the U.S. economic and jobs recovery will continue to play ball in 2012-2013.”
The survey, which gauges the mood and sentiment of small and medium sized business owners, found that nearly six in 10 (58%) expect their sales to increase in the next six months, up sharply from last fall (40%). Just 10% expect them to decrease, which is significantly lower than last fall (20%). Profits are also on the rebound, as 43% expect an increase compared to 29% in the fall.
To read the full survey results, click here.