Despite conflicting headlines, a majority of middle-market executives have a positive outlook for their company’s future and the U.S. economy this year, according to the ninth annual Business Leaders Outlook survey released Monday by JPMorgan Chase.
“Businesses are being more cautious as they focus their growth plans on what they can control,” Jim Glassman, senior economist at JPMorgan Chase, said. “They’re investing back into their business and preparing for disruptive forces like emerging technologies.”
According to the 2019 Business Leaders Outlook, 84 percent of midsize businesses and 74 percent of small businesses are optimistic about their company performance this year, with 91 percent of all businesses planning to maintain or increase capital expenditures.
With 81 percent of midsize companies expecting revenue to increase and 74 percent expecting higher profits, 66 percent plan to increase full-time personnel and 80 percent plan to increase compensation.
Among small businesses, 60 percent expect revenue growth and 58 percent expect higher profits. Therefore, 36 percent plan to increase full-time personnel and 41 percent plan to increase compensation.
“Businesses continue to feel positively about growth opportunities, but there’s some caution growing,” John Simmons, head of middle market banking and specialized industries at JPMorgan Chase, stated.
Due to trade policy worries, including tariffs, and softer economic trends outside the U.S., only 39 percent of midsize businesses and 38 percent of small businesses feel optimistic about the global economy over the next year. These percentages are down 30 points and 13 points, respectively, over last year.
“Trade tensions are likely influencing the outlook on the global economy, whereas the U.S. is riding the tailwinds of a big stimulus from last year’s tax reform,” Glassman stated. “It’s a fear of the unknown — and that can quickly fade if both the U.S. and China decide to dial down the noise around trade.”
A limited supply of talent due to applicable skill sets and fewer applicants also continues to be the biggest domestic issue, with 60 percent of middle market executives stating it as so.
“Executives are a bit less optimistic about the future and more concerned about trade policy — specifically tariffs — but that doesn’t mean their growth overseas is slowing,” Morgan McGrath, head of international banking at JPMorgan Chase, stated. “We continue to see companies that are global stay committed to further expansion abroad.”
To read the full report, click here.