This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Cautious Small Business Owners Further Postpone Hiring Amid Doubts On Sales And Economy

Stocks in this article: PNC

PITTSBURGH, Oct. 3, 2013 /PRNewswire/ -- Uncertain about their sales and the U.S. economy, nearly three out of four small and mid-sized business owners do not intend to hire new employees or seek new loans during the next six months, according to the new PNC Economic Outlook survey findings.

The fall findings of PNC's biannual survey, which began in 2003, reveal a decline in optimism compared to six months ago. Just over one-fifth (22 percent) are optimistic about their own company's prospects during the next six months compared to 26 percent in the spring. Expectations also declined on sales, with 43 percent expecting an increase during the next six months compared to 48 percent in the last survey.

The outlook on the U.S. economy remains cautious as 60 percent are optimistic and 39 percent are pessimistic compared to 58 percent and 41 percent in the spring. However, this is an improvement compared to one year ago when only 42 percent were optimistic and 57 percent were pessimistic ahead of the then presidential election and looming "fiscal cliff."

"The economy is expanding but growth remains disappointing," said Stuart Hoffman, chief economist at PNC. "These findings show small business owners are carefully taking half steps forward while keeping a wary eye looking for more customers and action in Washington to resolve the debt ceiling impasse and keep the federal government open."

Hoffman said PNC's baseline forecast is that the U.S. economic and jobs expansion will proceed at a moderate pace in the latter half of 2013 as the economic drag fades from higher tax rates and the $85 billion cut in federal spending (sequestration) and Europe slowly pulls out of recession.

Survey Highlights: Hiring, Health Care, Housing

  • Hiring on Hold: PNC's survey found only 16 percent intend to add full-time employees while eight percent plan to reduce staff and the remaining 73 percent will make no changes.
  • Business Investment Plans Increase: 63 percent plan to spend on capital investments in the next six months, up from 58 percent in the past two surveys. Technology equipment remains the top priority.
  • Little Demand for New Loans: Only one in five, however, will probably/definitely take out a new loan or line of credit in the next six months. This is an increase from the 12 percent in spring and 19 percent a year ago.
  • Impact of Sequester and Healthcare Reform: Nearly half (48 percent) say the $85 billion in federal spending cuts had no impact on the U.S. economic recovery in 2013 compared to 40 percent who say it had a negative effect. Meanwhile, 78 percent say the Affordable Care Act has had no impact on their hiring plans.
  • Rising Rates Cause Limited Concerns: Two in five (40 percent) say rising interest rates will hurt their business activity during the rest of 2013 while 59 percent foresee no adverse effect.
  • House Prices Rebound to Continue: Building on the dramatic turnaround first seen in our Fall 2012 survey, 58 percent expect local home prices will rise over the coming year, up from 48 percent in spring and 37 percent a year ago. This expected rebound is reinforced by sizable house price gains over the past year.
  • Price Inflation Remains Under Control: One-third (36 percent) plan to raise their selling prices and only five percent intend to cut their prices, signaling potential pricing pressures. Of those businesses planning hikes, 49 percent plan to increase prices by only 1-2 percent, which is the below the Federal Reserve's two percent inflation goal. 

An online media kit containing national and regional survey results is available on PNC's website at www.pnc.com/pncpresskits.

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 22 to Sept. 6, 2013, by telephone within the United States among 1,713 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 501 businesses nationally, while the remaining interviews were conducted among businesses within the states of Alabama, Florida, Georgia, Illinois, Indiana, Michigan, North Carolina, 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.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs