PNC Survey Shows Business Owners Remain Optimistic Despite Economic Uncertainty

According to the latest PNC Economic Outlook survey, optimism among small and mid-sized business owners remains strong, with more than half (56%) expressing confidence in the national economy, up from 34% a year ago. Additionally, 76% of respondents are highly optimistic about the prospects for their own business, while 64% expect increased demand in the next six months, signaling sustained confidence in business growth despite broader economic uncertainty.

Gus Faucher, Chief Economist at PNC, highlighted that this positive sentiment aligns with PNC’s forecast for a soft landing for the U.S. economy. He emphasized that while concerns about a recession have emerged, most business owners do not see it as a major threat, with only 33% believing it will have a significant impact on their business.

Key Findings from the Survey

• Economic Optimism: A majority (56%) of business owners remain optimistic about the national economy, up from 55% in the spring and significantly higher than last year’s 34%. Optimism about the local economy sits at 62%, while global economic optimism is slightly lower at 39%.
• Business Growth: 76% of business owners are optimistic about the future of their own business, a figure consistent with previous surveys. Moreover, 64% anticipate increased demand for their products or services over the next six months, while 41% expect to raise their inventory levels to meet this demand.
• Financing and Investments: Business owners are increasingly seeking new loans or lines of credit, with 29% planning to do so in the next six months—a survey high. Additionally, 30% of owners plan to increase capital spending, focusing on areas such as human resources, technology, and product development.
• Price Increases: A growing number of businesses (61%) are planning to raise customer prices in the next six months, up from 47% in the spring. Of these, 38% anticipate price increases of 5% or more, marking the highest percentage since 2010.

Challenges Facing Businesses:

• Hiring Difficulties: Despite optimism, nearly 35% of businesses report challenges in finding qualified employees. This is a return to 2023 levels after a brief improvement last spring.
• Inflation Concerns: Inflationary pressures remain a top concern, with 42% of business owners expecting U.S. consumer prices to rise by 5% or more in the coming year. Many businesses report rising costs from suppliers and increased employee compensation as significant factors impacting their operations.
• Political Uncertainty: As the 2024 U.S. Presidential Election approaches, concern over political uncertainty is on the rise. More than two-thirds (68%) of business owners expressed concern about the impact of U.S. political uncertainty on their businesses, up from 45% six months ago.

The survey, conducted by Artemis Strategy Group, involved 500 interviews with small and mid-sized business owners and leaders from July to August 2024, providing insights into the economic outlook and strategic priorities of businesses across the U.S.