Small Business Owners More Likely to Raise Pay Than Hire More Workers, Survey Shows
Small- and mid-sized business owners nationwide are optimistic about their sales and profits for the coming months, according to the latest PNC Economic Survey Outlook.
The survey found that 83 percent of the business owners surveyed are optimistic about their company’s prospects and 70 percent are optimistic about the overall U.S. economy.
In Pennsylvania, things are a little different. While optimistic, small business owners are just a bit more cautious.
“It looks like Pennsylvania, by and large, has fallen into a pattern that we’re used to in the state and that’s that growth will be continuing, but will be slower than the national average,” said Kurt Rankin, economist with PNC Financial.
The survey also found that small business owners are more likely to raise wages than to hire more employees. Twenty-two percent said they plan to add full-time employees, and 72 percent said they will keep staffing levels the same.
“Businesses have filled out their payrolls, they’re comfortable with their workforces and are willing to offer pay raises even in this low inflation environment in order to keep their existing, experienced workforces in place; not losing them to up and coming business opportunities or employee opportunities in other parts of the country,” said Rankin.
One of the factors spurring optimism is low lower energy prices.
“Low energy prices, by and large, are a good thing for the U.S. economy – both for the consumer and for businesses whose raw materials or energy costs for running their business are based on oil and natural gas prices,” said Rankin.
Rankin said energy prices are expected to stay low at least through the middle of the year. Nationally, business owners are expecting a strong 2015 and PNC forecasts that this year will see the fastest real GDP growth since 2004. In Pennsylvania, that growth is expected to be slower.
“Optimism is about as stable as it can be,” said Rankin. “It’s not improving, nor is it deteriorating. Pennsylvania has reached a steady state in its economic recovery and in its growth pace, which is at a pace that, unfortunate or not, we’re used to in Pennsylvania, which is a growth pace below the national average.”