PITTSBURGH, Oct. 7 /PRNewswire/ -- Six out of 10 small
business owners nationwide intend to increase capital spending but
delay hiring in a defensive move that reflects their lingering
concerns about the U.S. economy, according to the PNC Economic
Outlook survey's newest findings.
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The fall findings of the biannual survey, which began in 2003,
also found one out of 10 owners hired or plan to hire qualified
employees due to the tax credit offered by the HIRE Act passed by
Congress in the spring.
Overall, the outlook of small business owners has improved
slightly as eight out of 10 (compared to 76 percent in the spring)
are moderately to greatly optimistic about their own company's
prospects today while 20 percent are pessimistic (vs. 23
percent).
"Until we see a solid pattern of small business hiring and
investments re-established, the economic recovery will be a bumpy
road, but not another ride over a cliff," said Stuart Hoffman, chief economist for The PNC
Financial Services Group, Inc. (NYSE: PNC). "These findings support
PNC's view that the economy will remain transitional for the rest
of 2010 and into the first half of 2011 -- with weak but persistent
'half-speed' real GDP and job gains."
Highlights: Capital Spending, Sales, Hiring
The survey, which gauges the mood and sentiment of small and
medium sized business owners, found almost two-thirds (63 percent)
plan to increase capital spending during the next six months. This
is a significant increase from 49 percent in the spring. Technology
equipment spending leads the list of priorities as owners look to
maintain their operations without adding additional employees.
Other findings about the next six months include:
- Improved Access to Credit: While three out of four
owners (76 percent compared to 78 percent in the spring) do not
intend to seek a new loan or line of credit, they do see greater
access to financing. Thirteen percent (vs. 9 percent in the spring)
says it's easier to obtain credit while 44 percent (vs. 38 percent
in the spring) say it's neither easy nor difficult compared to
three months ago.
- Stalled Sales and Profits: Fewer than half (42 percent)
expect their sales to increase compared to 47 percent in the
spring. In terms of profits, 31 percent expect an increase, down
from 37 percent in the spring.
- Hiring Outlook Improved: 22 percent expect to hire
full-time employees, the same as spring and significantly better
than one year ago (17 percent). Only 12 percent plan to reduce
their workforce compared to 14 percent in the spring and 18 percent
one year ago. Manufacturing companies are most likely to hire
followed by the service industry.
- Still Waiting for U.S. Recovery: The overwhelming
majority (91 percent) say the U.S. economy has yet to noticeably
improve. Seven out of 10 (71 percent) feel the recovery is more
than one year away compared to 20 percent who expect improvement
within the next 12 months.
- Local View Is Better: The sentiment is slightly less
negative closer to home as 57 percent are optimistic and 42 percent
are pessimistic about the prospects for their local economy. This
compares to 41 percent optimistic and 58 percent pessimistic for
the U.S. economy.
- What's Your Worry?: One out of three (34 percent) say
weak sales/demand for service is the most important challenge
facing their business today. Their second concern at 21 percent is
"changes in government policy that affect my business." These far
outdistanced health insurance (12 percent) and taxes (11
percent).
An online media kit containing national and regional survey
results is available on PNC's website at
http://www.pnc.com/go/presskits.
The PNC Financial Services Group, Inc. (www.pnc.com) is one of
the nation's largest diversified financial services organizations
providing retail and business banking; residential mortgage
banking; specialized services for corporations and government
entities, including corporate banking, real estate finance and
asset-based lending; wealth management and asset management. Follow
@PNCNews on Twitter for breaking news and announcements from
PNC.
Methodology
The PNC Economic Outlook survey was conducted between
July 29 to August 25, 2010, by
telephone within the United States
among 1,200 owners or senior decision-makers of small and mid-sized
businesses with annual revenues of $100,000
to $250 million. The results given in this release are based
on interviews with 504 businesses nationally, while the remaining
interviews were conducted among businesses within the states of
Florida, Illinois, Indiana, Missouri, New
Jersey, Ohio and
Pennsylvania. Sampling error for
the national results is +/- 4.3 percent at the 95 percent
confidence level. The survey was conducted by Artemis Strategy
Group (www.ArtemisSG.com), a communications strategy research firm
specializing in brand positioning and policy issues. The firm,
headquartered in Washington D.C.,
provides communications research and consulting to a range of
public and private sector clients.
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 PNC Financial
Services Group, Inc. PNC makes no representations or warranties as
to the accuracy or completeness of the information, assumptions,
analyses or conclusions presented in the report. PNC cannot be held
responsible for any errors or misrepresentations contained in the
report or in the information gathered from third party sources. Any
reliance upon the information provided in the report is solely and
exclusively at your own risk.
CONTACT:
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Tim Rice
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(412) 762-8033
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timothy.rice@pnc.com
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SOURCE PNC Financial Services Group, Inc.
Copyright t. 7 PR Newswire