October 14, 2015
Small and mid-sized business owners remain relatively optimistic about their prospects during this fall and winter, according to PNC Bank’s semi-annual economic outlook survey. However, slightly fewer intend to hire and the number of them who expect lower sales grew.
Fourteen percent of survey respondents told PNC Bank that they planned to add staff in the next six months, versus 15 percent last spring, and 78 percent planned to maintain staffing levels, compared to 80 percent six months ago. Eight percent planned to cut staff in the next six months compared to just 1 percent last spring.
Survey respondents were a little less optimistic in their sales outlook, with 46 percent projecting an increase, 39 percent expecting no change, and 13 percent expecting lower sales. In the spring survey by PNC Bank, 53 percent of respondents said they expected to grow sales in the next six months, 43 percent expected no change, and 4 percent forecast a decline.
Despite the reduced expectations for hiring and sales growth, the PNC Bank survey found consistent optimism among small and mid-sized business owners.
“Michigan’s economic growth will continue to vary by region. The ties to the national economy via manufacturing operations continue to provide a positive influence as auto sales remain strong,” PNC economist Kurt Rankin wrote in a report on survey results. “The universities, health care and alternative energy research can help to establish a more balanced economy in the future.”
Among survey respondents, 31 percent were “very optimistic” about their business prospects in the next six months and 57 percent were “optimistic.” The remaining 11 percent were pessimistic.
Results from last spring’s survey found 28 percent of respondents were “very optimistic” and 59 percent were optimistic. Thirteen percent were pessimistic.
In the current survey, 23 percent were “very optimistic” about the local economy and 58 percent were “optimistic,” which compares to 14 percent and 72 percent, respectively, six months ago.
Two out of three business owners surveyed expect to earn a profit this year, with an average margin of 8 percent of sales. Nearly a quarter expect to make more than 10 percent over operating expenses.