News Release Details
Financial Press Release
Small And Mid-Size Business Leaders Curb Their Enthusiasm Somewhat, But Remain Optimistic About U.S. Economy
The share of respondents who described their outlook for the U.S. economy as strongly optimistic dropped from 40 percent to 29 percent, balanced by those with a moderately optimistic outlook rising from 48 percent to 58 percent. Just 12 percent of business owners and leaders expressed pessimism, up slightly from an all-time low of 9 percent in the spring.
"Small businesses are a key source of economic activity and employment, and owners' perceptions can be good indicators of what's to come," said
Further solidifying the anticipation of continued growth, more than half of business owners and leaders anticipate increases in sales (54 percent) and profits (51 percent) during the next six months, an increase over fall 2016, but a slight drop from post-election highs reported in spring 2017.
Key survey findings include:
Hiring Under Pressure: One in three (34 percent) say it's harder to hire qualified employees than it was six months to a year ago. Specifically, manufacturing and construction sectors most frequently cited hiring difficulties. The top challenges in hiring cited were:
- Inadequate skills and experience (44 percent)
- Overall lack of applicants (18 percent)
- Candidates requiring higher compensation than the business owner can afford (9 percent).
When offered as a response for the first time in the survey's history, one in 20 (5 percent) cite issues with candidates' abilities to pass required controlled substance screening.
"Hiring has become more difficult across all skill levels," said Faucher. "Organizations even report that they have turned down business because of a lack of workers. That said, the one ongoing problem with the economic expansion remains persistently soft wage growth. Given the low unemployment rate and consistent complaints from firms about the difficulty in finding workers, wage growth should be stronger. Wage growth is likely to pick up as the job market continues to tighten."
Wage Watchers: The proportion of employers anticipating to increase employee compensation continues to be relatively high, with 37 percent expecting to do so, a slight dip from 41 percent in the spring, but still well above the 28 percent from fall 2016. Among the majority (58 percent) who do not anticipate increasing pay, most believe their provided compensation is sufficient – either asserting that their current compensation level isn't affecting hiring or retention (34 percent), or that the pay is competitive for the industry (32 percent).
Certainly Uncertain About Policy: Thirty-six percent of respondents expect policy changes from the new administration and
A digital package containing national and regional survey results is available at http://pnc.mediaroom.com/digital-packages.
The PNC Economic Outlook survey was conducted by telephone from
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.