A record 84% of owners feel increasingly optimistic about prospects for their small and mid-sized businesses, though they see inflation as the biggest potential risk over the next six months, according to the latest semi-annual survey by PNC.
The Pittsburgh-based bank, which has about 105 offices in North Carolina, found optimism by business owners in Raleigh on par with the national average. They’re even more optimistic in the capital city than peers nationally about the U.S. and global economy. Similarly, three-quarters of Raleigh owners are positive about the local economy, higher than 67% nationally.
The findings “reflect good U.S. economic conditions heading into autumn with stock prices near record highs, continued job growth, and solid consumer demand,” PNC chief economist Gus Faucher said in a release earlier this week. “But risks to the economy are elevated, coming from tariffs and the uncertainty surrounding them, weaker job gains, and high interest rates.’’
The risk of higher prices ranks as an extreme concern for 51% of Raleigh owners and 46% in the U.S., PNC said. The inflation worries weigh on business expectations.
While 53% of Raleigh owners expect demand for their products or services to increase in the next six months, 46% expect to generate higher profit. Five percent of Raleigh owners expect to add full-time staff, while 15% plan to increase the number of hours worked per week.
Nationally, the survey found nearly six in 10 owners optimistic about the U.S. economy, up from 50% this past spring and 56% last fall. About 44% are bullish about the global economy, which is the highest in the survey’s history.
A recession is likely in the next 12 months, according to 35% of Raleigh owners. Seven percent consider a recession “extremely likely.”
PNC expects “continued economic growth over the next year, but at a slower pace, with higher inflation,’’ Faucher said “Some relief will come later this year as the Federal Reserve starts to lower interest rates in response to softer job growth.”
Artemis Strategy Group conducted the telephone survey of 500 owners, including 150 in Raleigh’s metro, in July and August. Respondents reported annual revenue of $100,000 to $250 million.
PNC said in November it plans to add about 35 in the Charlotte and Raleigh areas over the next five years.
