Small business optimism hits record high, gains momentum from vaccines and modified pandemic operations, PNC research shows

PITTSBURGH, September 27, 2021 /PRNewswire/ — Entrepreneurs are optimistic about the near-term future of their business amid rising vaccination rates, and those who report that more than three-quarters of their workforce have been vaccinated are the most positive about their business prospects. This includes expectations for higher demand, revenue and profit than companies reporting lower employee vaccination rates, according to PNC’s semi-annual national small business survey, which concluded. Aug 31.

Data collected during PNC’s research shows that vaccines are top-of-mind for business owners. Eight in 10 (79%) companies said they have taken action to encourage employee vaccination. Nearly half (48%) demand vaccinations from employees, 44% offer vaccination assistance, 26% encourage employees to get vaccinations and one in four (24%) have added restrictions for employees who choose not to be vaccinated vaccinate.

Those efforts could have an impact: More than three-quarters (78%) of survey respondents estimate that a majority of their employees have been vaccinated, and 43% believe their entire workforce has been vaccinated.

More than half (53%) of business leaders with fewer than 100 full-time employees have required their employees to get the vaccine, more than double that of companies with 100 or more full-time employees (26%).

“The survey results show that most business owners believe the vaccine can have a positive impact on their business,” PNC Chief Economist Gus Faucher said. “Further, entrepreneurial optimism is rising as vaccination coverage increases, indicating that efforts to support vaccinations in general could bolster the economic recovery.”

Labor shortages, inflation and the outlook

Despite the optimism among entrepreneurs, challenges remain. While more employers hope to hire – and hiring expectations have returned to pre-pandemic levels – many companies are struggling to find workers. Of all employers surveyed, labor availability is the most frequently cited concern, surpassing sales and supply chain concerns, which were reported as more prominent earlier this year. More than four in ten employers say they offer higher compensation to retain or attract new employees, make improvements in employee health or safety (46%) and allow more flexible working arrangements ( 44%).

Earnings expectations for the next six months have doubled since PNC’s spring survey, and sales and demand have reached the highest levels in the survey’s 19-year history.

“While circumstances changed rapidly in August as the Delta variant became more prominent and COVID-19 cases increased, there was essentially no change in expectations for sales growth between the first and second half of the month,” Faucher said. “While optimism for leaders’ own business prospects waned as the month progressed, it is still significantly higher than earlier this year, and the economic outlook remains solid.”

However, inflation is now of greater concern as price increases are expected to keep pace with higher input and labor costs. More than half (54%) of entrepreneurs surveyed expect to increase their prices, and the expected increases will be significant as more than a third expect to increase prices by 5% or more, citing favorable market conditions and higher costs as the main factors.

Different business environment

The nature of the number of companies operating has changed permanently since the pandemic, according to the latest research from PNC.

Nearly half (47%) had employees switched to remote work due to the pandemic and of those companies, four in 10 (42%) have fully returned to in-person work, with a further 17% expecting their workforce to eventually switch again . Many are anticipating more permanent changes, with 25% saying they will move to a mix of virtual and in-person, while another 9% give employees the ability to choose where they work.

“The pandemic will have far-reaching consequences for small businesses,” Faucher continued. “In addition to higher inflation and disruptions in manufacturing and labor markets in the short term, the relationship between companies and workers has changed. But in the long term, the economy will fully recover, benefiting small businesses and ultimately the economy. labor force.”

The full national and regional survey results are available at pnc.mediaroom.com. Other key findings include:

• Difficult to rent: Of entrepreneurs who hire and experience challenges, more than half (58%) cite increased unemployment benefits as the main cause, with 55% citing workers’ concerns about health and safety at work; 45% say employee priorities have changed; and 45% say workers demand higher wages.
• Inflation Pressure: More than half (54%) expect to raise their own prices in the next six months, a high point in PNC’s 19-year history conducting the survey. One in three (36%) expect the increases to be substantial: 5% or more. Four in ten (42%) say they raise prices in response to favorable market conditions (52% of service companies), but one in three (33%) cite higher non-wage costs and one in four (25%) cite higher labor costs. Non-wage costs are a more prominent factor in the industrial (45%) and construction (42%) sectors.
• Price pressure: Part of the price pressure comes from expected price increases from suppliers: almost half (46%) expect price increases from suppliers, little changed from spring (43%). Expectations for price increases from suppliers are higher in the industrial, wholesale/retail and construction sectors. These price dynamics have led to higher inflation expectations. Eight in ten respondents (80%) expect higher consumer prices this year, and most (62%) expect an increase of 3% or more; 38% expect a jump of 5% or more, a high survey.

The PNC Financial Services Group, Inc. (NYSE: PNC) is one of the largest diversified financial services companies in the world the United States, organized around its customers and communities for strong relationships and local delivery of retail and corporate banking, including a full range of credit products; specialized services for businesses and government agencies, including corporate banking, real estate financing and asset-based lending; asset management and asset management. For information about PNC, visit: www.pnc.com.

Methodology

The PNC Economic Outlook survey was conducted by telephone from: 2-8-2021 to 31-8-2021, in small and medium-sized companies with self-reported revenues of $100,000 until $250 million. 500 interviews were conducted nationwide. The sampling error for the national results is +/- 4.4% at a confidence level of 95%. The research was conducted by Artemis Strategy Group (www.ArtemisSG.com), a communications strategy research firm specializing in brand positioning and policy issues. The company, headquartered in Washington DC, provides communications research and advice to a range of clients in the public and private sectors.

DISCLAIMER: This report has been prepared for general information purposes only and is not intended as specific advice or recommendations. Any reliance on this information is solely and solely at your own risk. NOTE: The sum of the percentages cannot be added to the total due to rounding.

CONTACT:

Alan Aldinger

(412) 370-3887
[email protected]

SOURCE PNC Financial Services Group