According to the PNC’s latest biannual Economic Outlook survey, owners and executives of small and medium-sized businesses have an optimistic outlook on the short-term future of their businesses as they overcome inflationary pressures, disruptions in the supply chain and political and geopolitical uncertainties related to the national and local economy.
The survey showed that the expectations of business leaders about their own companies remain solid: almost half ( 49%) is feeling very optimistic, similar to the spring survey, while the share feeling pessimistic has risen to 7% from a low historic 2% in the spring.
Concerns about inflation and the impact of price increases on their businesses continue to be a priority among owners and executives. Ongoing price increases are in the works among 63% of businesses. Of those who expect to increase their prices, more than a third (36%) expect to make increases to the consumer by 5% or more during the next year, up from one in four last spring and almost back to the all-time high of 38% per year.
According to the survey, the main reason for price increases has gone from an effort to keeping up with rising non-labor costs (38% vs. 63 % last spring) at favorable market conditions (44% vs. 22% previous). Less than a fifth (22%) points to an increase in labor costs. Price pressures on their businesses and high supplier costs and capital spending are also factors.
In addition to raising the prices of their own goods and services, 7 out of 10 (69%) have indicated that they are making other adjustments to cope with higher inflation, including increasing efficiency, cutting costs or managing cash flow.
Business owners are also expressing concern that a recession is looming . Nearly 7 out of 10 (49%) fear that a recession occurs in the next 12 months.
“This survey demonstrates that business owners see overall conditions as remaining strong despite concerns about high inflation. Business leaders surveyed indicate they are now raising prices because they can, rather than because they have to. This reflects continued strong demand across the economy, despite higher interest rates,” said Gus Faucher, chief economist at PNC.
“There has been a lot of discussion and debate about the likelihood of a recession in the short term and businessmen are clearly considering this possibility“, said Faucher. “Although PNC believes that the probability of a recession is low in the short term, we believe that there is a high probability of 45% of a recession in the next two months. years“.
For more details about the survey enter here.
You may also like:
– The 87% of Americans think they should get a raise to keep up with inflation
– 7 of 10 Americans are worried about a possible recession by the end of 2023: Bankrate
– The United States has 60% chance of falling into recession, according to UBS analysts