News Release Details
Financial Press Release
Optimistic U.S. Business Owners Plan More Hiring and Raises for Employees
The fall findings of PNC's biannual telephone survey, which began in 2003, reveal that one in four (26 percent) expect to hire additional full-time employees, the most since 2012 and second highest since 2007. Forty-two percent, meanwhile, intend to increase employees' pay, which is the most since 2007. One in four businesses (26 percent) also say they have hired in the last six months -- a significant increase over the 18 percent in the spring.
This positive outlook is bolstered by a decline in pricing pressure, in part due to the sharp drop in energy prices. Twenty-eight percent plan to charge higher prices this year, down from 38 percent one year ago. For prices charged by suppliers, 50 percent expect price hikes this year compared to 62 percent last year.
"Small businesses are like the economy's grass roots based on the employment and economic activity they create," said PNC's Chief Economist
Owners, however, are also finding it increasingly difficult to hire qualified workers. The survey shows that 34 percent say it has become harder to hire qualified employees than it was a year ago. One in 10 (11 percent) who are not hiring say they it is because they cannot find the right skilled workers.
Optimistic Outlook, Profitable Year
Nearly nine out of 10 (87 percent) owners are optimistic about their company's overall prospects – an increase from 83 percent in the spring. At the same time, 76 percent are optimistic about their local economy, the highest number since 2007, but 67 percent are optimistic about the U.S. economy.
Ninety percent of business owners say they will at least break even this year, including 70 percent who believe they will make a profit. The average profit is about seven percent of sales. Only six percent expect a loss.
Financing Needs Remain Limited
Although expectations for business prospects are promising, loan and credit demand continue on a slow path upward. Eight out of 10 owners say they will not pursue new loans or lines of credit in the next six months while 18 percent will. When asked about access to credit, 23 percent say it is easier and only 12 percent say it is harder now compared to three months ago.
Other key findings include:
- Reinvesting in the Business: Of those expecting to make a profit this year, 36 percent say they intend to invest in business operations followed by: add to cash reserves (29 percent); distribute money to owners (27 percent); and pay off debts and liabilities (25 percent).
- Healthcare Cost Impact: Almost half (49 percent) believe their company's cost for employee health care will rise in the next six months, up from 44 percent in the spring. More than half (53 percent) said they believe the Affordable Care Act will have a negative impact on business costs in 2015, up from 49 percent in the spring.
- Housing Prices Continue to
Rise: 58 percent expect housing prices to rise in their local market in the next 6-12 months, on a par with 59 percent six months ago and 52 percent one year ago.
An online media kit containing national and regional survey results is available on PNC's website at www.pnc.com/pncpresskits.
The PNC Economic Outlook survey was conducted between
This report has been prepared for general informational purposes only and is not intended as specific advice or recommendations. Information has been gathered from third party sources and has not been independently verified or accepted by The
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