While North Carolina business people are slightly less optimistic about the economy this fall, their outlook is still more positive than it was a year ago, according to PNC Bank’s semiannual survey of small and middle-market business owners and executives in the state.
“Historic optimism about the national economy from spring (48 percent) chilled slightly this fall (46 percent), but remains well above fall 2017 (30 percent),” the survey report stated. “Forty-six percent of business leaders described their outlook for the national economy as optimistic, the second-highest ranking in the seven-year survey. Half are optimistic regarding their own businesses for the next six months, a slight drop from the historic high of 52 percent in spring 2018.”
Expectations for increased sales are one reason for the North Carolina business owners’ optimism, according to the PNC report.
“Six in 10 business leaders expect increased profits, dropping from spring 2018 (70 percent) but still well above fall 2017 (50 percent),” the report stated.
Prices of goods and services were also on the minds of survey respondents. More than half (57 percent) anticipate their suppliers will charge more, and 46 percent plan to charge their customers more. Only 1 percent of businesses expect to lower prices.
These results show a significant increase from the spring 2018 survey, in which 46 percent of respondents expected higher supplier prices and 34 percent planned to charge their customers more.
“Keeping up with rising non-labor costs and increasing business and favorable market conditions are among the key drivers of higher prices,” the report said.
With regard to wages, the survey found respondents planning to increase wages is at a survey high of 43 percent (compared to 38 percent in the spring survey). Only 2 percent plan to decrease wages, a survey low.
“Among those business leaders planning to decrease or maintain wages, nearly two-thirds (64 percent) point to wages that are already competitive for their industry and see no issues with employee turnover at current wages as deciding factors,” the report stated, adding, “Nearly two in 10 North Carolina business leaders (18 percent) plan to add full-time employees in the next six months; just two percent expect to reduce the number of full-time employees.”
In their optimism about the national economy and their own prospects, North Carolina business people ranked slightly above the national average in the PNC survey.
“North Carolina continues to enjoy robust job growth coupled with low unemployment rates in most counties,” said PNC economist Gus Faucher in his survey analysis. “With a strengthening in manufacturing, the gap in economic activity between metro and rural areas is tightening. With large population gains and solid national economic growth, the North Carolina economy will continue to expand into 2019. The effects of [Hurricane] Florence will be felt in Eastern Carolina, but the immediate economic damage will be small and temporary.”