American business owners are feeling better than they have in years, thanks in part to recent regulatory reform, corporate tax cuts and a steadily improving economy. But they’re getting nervous about finding the skilled workers they need to grow as their older workers retire, according to the annual JPMorgan Chase Business Leaders Outlook report released today.
“This trending positivity is confirmation that something real is happening in the economy,” said Jim Glassman, senior economist at JPMorgan Chase. “Business optimism translates to business activity, which is why we’re seeing increased expectations across the board. For businesses that can hire and retain talent in today’s tight labor market, there are growth opportunities to capitalize on.”
Among midsize businesses, optimism is up across the board, year over year:
- 69% are optimistic about the global economy, more than double last year’s sentiment and the highest since the survey began eight years ago
- 89% are optimistic about the national economy, up 9 points vs. last year
- 75% are optimistic about their local economy, up 7 points vs. last year
Among small businesses, optimism for the global and local economy is the highest it’s been in several years:
- 51% are optimistic about the global economy, up 10 points vs. last year
- 63% are optimistic about the national economy, consistent with last year
- 60% are optimistic about their local economy, up 5 points vs. last year
The new tax law is front and center for midsize businesses, with most (91%) expecting it to help their business. Only 37% of small businesses expect it to positively impact their business’s bottom line while almost an equal number expect no impact (30%). With their tax savings, midsize businesses indicate they plan to:
- Pay down debt: 44%
- Invest in capital expenditures: 43%
- Increase wages: 33%
When it comes to hiring and pay, midsize businesses indicate they are also more likely to boost spending:
- Increase hiring of full-time personnel: 64%, up 7 points vs. last year
- Boost compensation: 76%, up 5 points vs. last year
Small businesses, meanwhile, indicate they are more likely to hold the line:
- No changes to full-time personnel: 65%, consistent with last year
- No change in compensation: 56%, consistent with last year
What midsize businesses are thinking about business expectations and challenges:
They expect to increase sales (82%), profits (75%), capital expenditures (42%) and credit needs (30%), all up year over year