Maybe they just pumped their brakes a touch, and there’s still considerable optimism going forward from small to mid-sized business owners across Michigan, but some employers may have essentially cautioned one another to “curb your enthusiasm.” That’s the quick read from the Fall Economic Outlook Survey produced by PNC Bank.
In PNC’s biannual telephone survey of small and medium-sized business owners just released, optimism remains high, but has moderated from the historic highs recorded earlier this year in the bank’s spring report which was still floating on the aftermath of the 2016 elections.
Reading the tea leaves of the fall report released this week, Michigan’s economy will continue to recover for the balance of the year, and strong job growth spanning a broad base of industries will allow the region to continue its upward climb, but following last spring’s record high levels of optimism in the five-year history of PNC’s survey in Michigan, business leaders’ optimism about the national and local economy, as well as their own business for the next six months, tempered slightly this fall. Nevertheless, the numbers remain higher than those recorded a year ago in the fall of 2016.
Of note, the share of respondents who described their outlook for the U.S. economy as “strongly optimistic” dropped to 30-percent from 38-percent, while the share with a “moderately optimistic” outlook rose to 55-percent from 49-percent. The survey shows only 11-percent of business owners and leaders expressed pessimism, still at an all-time low, and matching last spring’s report.
PNC Economist Kurt Rankin tells us, “More than half of Michigan business owners and leaders anticipate increases in sales during the next six months, a slight drop from the post-election high last spring, but well above last fall.” The report goes on to say that “Half (51-percent) expect profit increases, an uptick from 46-percent in spring and 38-percent last fall.”
Hiring expectations are positive, overall, according to the report, as “Nearly one-quarter of those surveyed expect to increase the number of full-time employees, a slight improvement over spring,” and “Eight percent plan a reduction.”
As has been the mantra for months, More than one third (36-percent) of survey respondents told PNC number-crunchers, “It’s harder to hire qualified employees than it was six months to a year ago, up from 26-percent in spring 2017.” Cited as the top challenges in hiring: inadequate skills & experience (42-percent)…Overall lack of applicants (24-percent)…and candidates requiring higher compensation than the business owner can afford (8-percent).
The new fall survey was the first time that employers were asked about issues with job candidate ability to pass a required controlled substance screening, and 4-percent cited that as a hiring challenge.
The PNC report also looks at wage rates and shows us, “The proportion of employers who anticipate increasing employee compensation continues to be relatively high, with 42-percent in Michigan expecting to increase, running well above the 30-percent of last spring and 25-percent from fall a year ago.
You can read the full PNC report from Kurt Rankin by clicking the link below:
