Pennsylvania small business owners are looking at the next six months with some optimism, according to the most recent findings from PNC’s biannual Economic Outlook Survey.
The survey found the percentage of small business owners in the state expecting to raise employee wages increased from 29 to 45 percent.
“Which is not only a big jump from our spring survey results for the state, but is well above neighboring states: Michigan, Ohio, Indiana,” said Kurt Rankin, PNC economist. “This is a pretty encouraging number that says small business owners are facing the need to raise wages in order to hold on to and attract new talent.”
He said until this point, expectations of wage increases were missing from prior surveys and other national reports on the healing economy.
According to Rankin, these findings are the result of a slow growth that has taken place in the state's economy over recent years, including a drop in the unemployment rate.
“The state continues to add jobs, (but) not in leaps and bounds. Those days for the state, unfortunately, are behind us.” He said, “But what we’ve seen in the past has gotten us now to an unemployment rate approaching five percent for the state, and that’s a pretty good number.”
Rankin said Pennsylvania has faced “labor out-migration,” with many qualified workers being drawn out of the state, meaning many local companies could have to shift their focus.
“In order to keep and retain and expand their employees and expand their businesses going forward, they are going to need to look towards hiring more workers and paying those workers better,” he said.
Pessimism for the local economies in which the individual companies work rose from 35 percent to 43 percent, which was a rare negative finding in an otherwise positive survey, according to Rankin.
“I suspect that number is based on how the past year went versus the coming six months…Because the state’s economy won’t be facing any significant hurdles over the coming year that suggests to small businesses that they’ll need to cut back,” he said.