Amid Global Complexity, Businesses Continue to Bet on Themselves, JPMorgan Chase Survey Finds
January 06 2020 - 7:09AM
Business Wire
- Businesses ramping up technology investments to reach more
customers, prepare for the future
- Companies plan to improve benefits and compensation to attract
and retain talent
Most small and midsize U.S. business leaders expect continued
growth for their companies this year amid a less robust economic
environment, according to the annual JPMorgan Chase Business
Leaders Outlook survey released today. Three out of 4
businesses – 76% of midsize companies and 74% of small ones – are
optimistic about their own performance, and the majority expect to
grow sales this year (70% of midsize companies and 62% of small
ones). They’re leaning into this expected growth through measures
including more widespread adoption of new technology and increased
hiring.
The national and global business outlooks are more cautious,
with midsize companies in particular reporting a drop in optimism
from 2019. While more than half of midsize (59%) and small (52%)
businesses remain optimistic about the national economy, this marks
a decline of 14 and 3 points from a year ago, respectively.
Optimism about the global economy is also down for midsize
companies, which are more likely to have exposure to international
markets: 24% are optimistic compared to 39% in 2019. Among small
businesses, global optimism is steady at 40% compared to 38% in
2019.
“Businesses are becoming used to a new normal as the pace of
economic expansion naturally settles down,” said Jim Glassman,
senior economist at JPMorgan Chase. “But it’s important to note
that slowing economic growth isn’t a sign of weakness, and many of
the concerns business leaders have point toward an economy that’s
running at its full potential.”
Leaning into Disruption: When it comes to preparing for
disruption, even more business leaders are mobilizing to make
changes now compared to 2019: 89% of midsize companies and 61% of
small ones report taking actions including purchasing cyber
insurance, creating contingency plans and designating individuals
and teams to identify threats and opportunities. Businesses are
also embracing emerging technologies to increase efficiencies and
reach customers more directly.
- For midsize businesses, cloud computing is expected to be the
most widely deployed technology for 2020, with 73% planning to use
it, followed by data-driven targeted marketing (50%) and
application programming interfaces (APIs) at 46%.
- Small businesses are increasingly feeling the impacts of
e-commerce disruption, but 57% feel confident in their ability to
manage this challenge.
“In an era of rapid technological change, businesses are
demonstrating their resiliency and taking steps to future-proof
their companies,” said John Simmons, head of Middle Market Banking
& Specialized Industries at JPMorgan Chase. “Harnessing new
tools and technologies and remaining agile will help accelerate
growth in today’s competitive environment.”
Hiring from a Shrinking Talent Pool: Businesses want to
hire to prepare for an expected uptick in sales, but a limited
supply of qualified candidates is making it increasingly difficult
to do so.
- For the second consecutive year, midsize businesses rank this
as the #1 challenge, constrained by a lack of applicants and unique
skills needed for the job. This is a reality for small businesses
as well: 31% report that they are extremely or very concerned about
the candidate supply, up from 28% last year.
- Still, businesses are forging ahead: 55% of midsize businesses
and 39% of small ones expect to increase full-time employees over
the next year. Small businesses also expect a jump in part-time
employment, with 38% planning to hire, up 7 percentage points from
2019.
- To retain talent, businesses plan to increase compensation,
improve benefits and provide flexible hours.
Setting Sights on Business Abroad: Despite geopolitical
and trade-related concerns, midsize businesses remain heavily
invested overseas and are continuing to expand into new
international markets at earlier stages in their lifecycles. Nearly
half (47%) of midsize businesses have sales outside the U.S., with
an additional 14% planning to establish international sales or
operations in the next three years.
Unexpected Growth is Common: Many small businesses (69%)
report having experienced unexpected growth and of these companies,
91% have gone through it more than once. While small business
leaders feel largely positive about the growth, they acknowledge
having to work longer hours and purchase more supplies and
inventory as a result.
“Unexpected growth is a good problem to have but it can be
stressful for small business owners,” said Business Banking CEO Jen
Roberts. “They have to reassess their short and long-term
strategies, which could mean managing their cash flow more
efficiently, incentivizing staff, or investing in technology to
help them scale.”
Planning For the New Decade:
Businesses should get comfortable with today’s complex operating
environment, and keep the following considerations in mind as they
plan for the year ahead:
- Don’t be fazed by the US economy’s new normal. The
durability of today’s expansion is unlike anything we’ve seen
before. Rather than compare to business cycles of the past, look
instead to key metrics like unemployment and inflation to get a
fuller picture of the economy’s health. With strong fundamentals
and no clear recessionary trigger, it seems likely the expansion
could continue at a slower pace for a sustained period. Learn
more.
- Embrace technological change head-on. The most
successful businesses are using technology to stay ahead of the
competition, drive efficiency and build a seamless customer
experience. Evaluate the latest tools to make sure your business
isn’t left behind. Learn more.
- Educate staff on cybersecurity. With the pace of
cyberattacks rapidly accelerating, 2020 is the year to make
cybersecurity a priority. Defenses are only as strong as your
least-prepared employee, so investing in training and controls can
help protect against the threat of sophisticated attacks. Learn
more.
- Make your values central to your business. In a tight
labor market, defining and investing in your company’s
environmental, social and governance priorities can be a
differentiator in employee recruitment and retention. Learn
more.
- Take advantage of global expansion. Despite geopolitical
complexities, international business opportunities are too
significant to ignore—and the ease of technology and travel make
them more accessible than ever for companies. Evaluate global
markets and supply chains carefully to determine how to best tap
into new markets. Learn more.
For more information on the Business Leaders Outlook, please
view the midsize and small business reports.
Survey Methodology
JPMorgan Chase’s Business Leaders Outlook survey was conducted
online from October 7 to 15, 2019, for small businesses (annual
revenues between $100,000 and $20 million) and from October 29 to
November 19, 2019, for middle market companies (annual revenues
between $20 million and $500 million). In total, more than 1,800
business leaders in various industries across the U.S. participated
in the survey. For year-over-year trends, current data is compared
to data collected in the first quarter of previous years. The
results of this online survey are within statistical parameters for
validity, and the error rate is plus or minus 2.5% for the small
business findings and plus or minus 3.3% for the midsize business
findings, both at the 95% confidence level.
About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading global
financial services firm with assets of $2.8 trillion and operations
worldwide. The Firm is a leader in investment banking, financial
services for consumers and small businesses, commercial banking,
financial transaction processing, and asset management. A component
of the Dow Jones Industrial Average, JPMorgan Chase & Co.
serves millions of customers in the United States and many of the
world’s most prominent corporate, institutional and government
clients under its J.P. Morgan and Chase brands. Information about
JPMorgan Chase & Co. is available at www.jpmorganchase.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200106005480/en/
Commercial Banking: Janet Yoo, janet.h.yoo@chase.com
Business Banking: Kimberly Hooks, kimberly.hooks@chase.com
JP Morgan Chase (NYSE:JPM)
Historical Stock Chart
From Aug 2024 to Sep 2024
JP Morgan Chase (NYSE:JPM)
Historical Stock Chart
From Sep 2023 to Sep 2024