Metro Businesses Cautious About National Economy

PNC released it's semi-annual outlook results for small business owners in metro Atlanta today.

Highlights include a positive outlook on profits and sales for the next six months, although business owners have a more cautious outlook on the national economy.

Among the key findings:

• Fewer pay raises on the way: 17 percent expect to increase employees’ pay, down from 31 percent in fall and 31 percent last spring.
• Shortage of skilled workers: One in four say it is harder to find qualified employees compared to 6-12 months ago. The biggest challenge is that candidates don’t have skills needed for the job. The biggest void is technical skills specific to the business, i.e., computer applications, tools or machinery.
• Pricing pressure: 31 percent plan to charge higher prices, up from 25 percent in the fall. For prices charged by suppliers, 39 percent expect price hikes compared to 36 percent six months ago. 81 percent expect consumer prices to rise this year, despite the sharp drop in energy prices over the past year.
• Profits: 71 percent of Atlanta business owners expect to make a net profit this year, consistent with 70 percent six months ago. The average profit is about 8 percent of sales. 37 percent expect to make more than 10 percent over operating expenses, up from 26 percent last fall.
• Growth: 32 percent hope to substantially grow their business by 10 percent or more over the next two years. One in three cite their own personal drive rising as the top factor. This is followed closely by rising customer demand, understanding their marketplace and competition and hiring the right people.
• Little demand for loans: Over eight in 10 owners (83 percent) say they will not pursue new loans or lines of credit in the next six months while 13 percent will. Asked if the prospect of rising interest rates would impact pursuit of a loan, 72 percent said it wouldn’t.
• Health care – Costs and ACA: 39 percent said insurance premiums increased in 2015. Looking ahead to 2016, 23 percent expect these costs to increase, down from 36 percent in the fall. Asked about the Affordable Care Act, 80 percent say it had no effect on their 2015 hiring; 91 percent expect no impact this year.