Marc Eddy is a senior vice president, small-business banking manager at Bank of America in Providence. He talks with Providence Business News about a recent small-business survey done by the bank. Eddy also discusses overall business trends in the nation and in Rhode Island.
PBN: Tell our readers a little bit about what results you saw in Bank of America’s recent small-business owners survey?
EDDY: There are some amazing data points from the survey, which is a national survey, but one where we did ask business owners to also speak to their local economy as well. The overall theme of the report is that business owners are optimistic about the short term, on both a national and local level. Fifty-two percent of business owners think the economy will improve over the next 12 months, which is an increase from last year’s survey, when only 31 percent had that kind of optimism.
PBN: What surprised you the most?
EDDY: Two areas surprised me, and there’s a connection between them. First, the hiring plans for business owners are the lowest we have seen since 2012. Only 18 percent of business owners told us [they] plan to hire this year, though an increase of small-business owners said they would retain their current number of employees. The second is that 47 percent of business owners have invested in new and/or upgraded technology in the past two years. These two data points have a correlation, as the optimism we’re seeing is translating more into equipment and space upgrades, rather than additional staff. Hiring new employees is a big business decision and not one small-business owners take lightly, so it could be that there is still a wait-and-see effect when it comes to this aspect of planning for the year ahead.
PBN: How does that speak to overall trends you’re seeing in the United States and, more specifically, Rhode Island?
EDDY: The trends we are seeing are about confidence and revenue-growth plans. Comparing 2016 to 2015, 80 percent of businesses increased revenue or remained flat (only 20 percent of businesses had declining revenue). In terms of their confidence for the future growth of their business, 56 percent of business owners expect to grow over the next five years. Those are national numbers, but they generally reflect what we’re seeing in Rhode Island as well. More specifically, in the state we’re seeing an increased demand for real estate, driven in part by the optimism captured in the survey and in part by a conductive regional market.
PBN: What do you see fueling that dynamic?
EDDY: Factors related to this include innovation and the use of technology to make businesses more efficient and competitive, as well as a generational divide, as millennials and GenX business owners are much more confident about revenue growth for their businesses this year (65 percent and 62 percent, respectively, versus baby boomers and seniors at 43 percent and 33 percent, respectively.)
PBN: What sectors are realizing growth in Rhode Island and which ones are struggling?
EDDY: While I don’t have sector- or industry-specific data for just Rhode Island, I have seen the trends be very similar to the national perspective. In the state, we’re seeing positive signs in health care, secondary health care and tech. The businesses that are utilizing technology to be more efficient, more productive and reduce costs are also the businesses that are expecting growth. Furthermore, these businesses are looking for ways to be more innovative with marketing technology. This time last year, only 17 percent of businesses expected to use financing for marketing purposes; today that number has almost tripled to 43 percent – a good sign that businesses are optimistic about growth and the chance to grab market share.
The full survey can be found HERE.
Eli Sherman is a PBN staff writer.
