PROVIDENCE – Most small and midsize U.S. companies have a positive outlook for the domestic economy and expect their businesses to continue growing this year, despite the softened economic outlook for 2019, according to banking giant J.P. Morgan Chase & Co.’s recently released annual Business Leaders Outlook survey.
Overall, 84 percent of midsize companies and 74 percent of small companies are optimistic about their performance moving forward, according to the survey results, released Jan. 7.
“Businesses are being more cautious as they focus their growth plans on what they can control,” said Jim Glassman, senior economist at JPMorgan Chase. “They’re investing back into their business and preparing for disruptive forces [such as] emerging technologies.”
A majority of businesses – 73 percent of midsize firms and 55 percent of small firms – remain optimistic about the national economy, though that’s down 16 percentage points and 8 percentage points, respectively, from a year ago.
Regarding the global economy, just 39 percent of midsize firms and 38 percent of small firms remain optimistic for 2019, down 30 percentage points and 13 percentage points, respectively, from last year.
“Businesses remain optimistic about the global outlook but are more cautious than they were last year because of trade tensions, uncertainty around tariffs and where we are in the economic cycle,” Glassman said.
The survey queried more than 1,800 business leaders nationwide across various industries. The survey, done in November, targeted small companies, or those with annual revenues between $100,000 and $20 million, and midsize companies, or those with annual revenues between $20 million and $50 million.
Other findings include:
- Investing for growth: Nearly all companies – 91 percent of small and midsize firms – plan to maintain or increase their capital expenditures. That’s because 81 percent of midsize firms expect their revenue/sales to rise in 2019 and 74 percent expect higher profits. Among small businesses, 60 percent expect revenue/sales growth and 58 percent expect to see higher profits.
- Help wanted: Two-thirds of midsize companies plan to hire more full-time personal and 80 percent plan to increase compensation in the next year. Small businesses are more conservative – slightly more than one-third plan to add full-timers and 41 percent will increase compensation.
- Good help hard to find: Midsize businesses rank the limited supply of talent as their top challenge, and it’s become more challenging over the last few years. More than half of midsize businesses report being very concerned or extremely concerned. Small businesses are concerned but to a lesser degree: 28 percent are very concerned or extremely concerned about potential challenges due to a limited supply of candidates.
- Taking on technology: Company leaders are already preparing to face disruptive technology changes and challenges; 75 percent of midsize companies and 52 percent of small ones have taken actions such as having an in-house person or team to identify technological threats or opportunities and conducting regular firewall testing. The survey defined disruptive technology as one that displaces an established technology and shakes up an industry or is a groundbreaking product or service that creates a completely new industry.
Scott Blake is PBN staff writer. Email him at Blake@PBN.com.