For all the talk about the Delta variant, a rise in COVID-19 cases and a worker shortage, there is optimism.
From business owners, no less.
Thanks mainly to increasing vaccination rates, business owners are feeling optimistic about the near-term future of their businesses, according to PNC’s semiannual national small business survey, which concluded Aug. 31.
Business owners who said more than three-quarters of their workforce has been vaccinated are the most positive about their business outlook. This includes expectations for higher demand, sales and profits than companies reporting a lower rate of employee vaccination.
Data gathered during PNC’s survey demonstrated that vaccines are top-of-mind for business owners:
- Eight in 10 (79%) businesses said they have taken action to encourage employee vaccination;
- Nearly half (48%) are requiring employee vaccinations;
- Almost half (44%) are providing assistance related to vaccinations;
- One in four (26%) are incentivizing employees to receive vaccinations;
- And one in four (24%) have added restrictions for employees who choose not to be vaccinated.
Those efforts may well be making 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 is vaccinated.
More than half (53%) of business leaders with fewer than 100 full-time employees have required their employees to receive the vaccine, more than double that of businesses with 100 or more full-time employees (26%).
“The survey results demonstrate that most business owners believe the vaccine can have a positive impact on their businesses,” PNC Chief Economist Gus Faucher said. “Further, business owner optimism rises as vaccination rates increase, indicating that efforts to support vaccinations broadly could strengthen the economic recovery.”
Profit 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.
“Although conditions changed rapidly in August as the Delta variant became more prominent and COVID-19 cases rose, there was essentially no change in sales growth expectations between the first and second halves of the month,” Faucher said. “While optimism for leaders’ own business prospects tempered as the month progressed, it is still significantly higher than it was earlier this year, and the economic outlook remains solid.”
Despite the optimism among business owners, challenges do remain. Most notably: hiring.
While more employers hope to hire — and hiring expectations have returned to pre-pandemic levels — many businesses are struggling to find employees.
Among all employers surveyed, labor availability is the most frequently mentioned concern, topping sales and supply chain worries that were reported as more prominent earlier in the year. More than four in 10 employers said they are offering increased compensation to retain or attract new employees, implementing employee health or safety improvements (46%) and allowing more flexible work arrangements (44%).
Inflation also is of great concern, as price hikes are expected to keep up with higher input and labor costs. More than half (54%) of business owners surveyed expect to increase their prices, and the anticipated hikes will be substantial, as more than a third expect to boost prices 5% or more, with favorable market conditions and higher costs cited as the leading factors.