PNC Survey Shows Business Owner Optimism Soars To 21-Year Record High While Hiring Concerns Linger

Pittsburgh, PA - PNC's latest semi-annual survey of small and mid-sized businesses shows that business owner optimism about the outlook for their own business in the next months has reached a 21-year high. The survey was conducted by telephone from 7/5/2023 to 8/9/2023, among small and mid-sized businesses with self-reported revenue of $100,000 to $250 million. 500 interviews were conducted nationally.

• 77% of surveyed small and mid-sized business owners optimistic about their business
• Despite economist expectations for recession, elevated optimism for national economy
• Almost half of respondents say there aren't enough applicants for open positions

Despite PNC economists' predictions for a shallow recession starting in early 2024, business leaders' outlook about their own companies has risen sharply this fall, with over three-quarters (77%) feeling highly optimistic compared to 49% a year ago and 60% in the spring.

• 47% are highly optimistic about the local economy, compared to 29% last fall and 34% are highly optimistic about the national economy compared to 22% a year ago.
• 55% expecting profits to rise (compared to 46% last fall) and 64% expecting an increase in demand in the next six months (compared to 57% a year ago).
• 62% expecting sales to increase.

"While the large spike in optimism among these business owners is a surprise, it can be attributed in part to the resilience that they demonstrated during the challenging years they have faced since the pandemic began," PNC Chief Economist Gus Faucher said. "Business owners who survived that demanding time are confident in their ability to run their businesses and focus on what they can control versus what they can't."

Hiring Remains a Challenge

Nine in 10 employers say they intend to hold steady on hiring with just 9% planning to increase their staffing and just 1% expecting layoffs. Among businesses looking to hire employees, one in three (35%) say it's become harder to hire qualified employees over the past six months, similar to last spring (36%) and a year ago (39%). The most common reason employers say it has become harder to hire is that there are not enough applicants overall (49%). Other reasons cited are candidates' lack of experience or skills (22%), high salary/benefit requirements (14%), and inability to meet legal/security requirements (6%).

Raising Prices

As inflation has eased over the last year, so have owners' expectations on raising prices. More than half (55%) of businesses say they expect to increase prices in the next six months, unchanged from last spring but significantly fewer than a year ago (63%).

Fewer expect their price increases to be 5% or more as compared to last fall (25% vs. 36% in fall 2022) while 56% are expecting a more moderate raise of 3% to 4%, significantly up from a year ago (38%). 

Full national and regional survey results are available at pnc.mediaroom.com.