April 3, 2014
Ohio’s small and medium-size businesses are feeling more confident these days — but not enough to start adding employees, according to a report by PNC Bank.
The Pittsburgh-based bank’s spring survey, released this morning, found that 48 percent of business owners expect sales to increase and 37 percent say profits will go up in the next six months. Both figures are better than in the bank’s spring and fall surveys last year.
Further, the report found 28 percent of business owners optimistic about their company’s prospects in the coming six months, better than the 22 percent that said so in the fall survey and the 21 percent polled last spring. The new survey found 13 percent called themselves pessimistic, down from 20 percent in the fall.
Despite the growing optimism, only 10 percent of the business owners said they plan to add full-time employees in the months ahead. That’s down from 2013; 14 percent polled in last spring’s survey planned hiring, as did 17 percent in the fall survey.
PNC economist Mekael Teshome said a couple of factors that weighed on businesses last year — the federal government shutdown and increasing taxes — were absent this time around.
“Now those are being lifted, so sentiment is improving,” Teshome said. “We also are seeing an improved sales outlook as well.”
Teshome acknowledged that the optimism doesn’t extend to hiring.
While the economy has been out of recession for a few years, a series of events including the Arab Spring, the Japanese tsunami, higher tax rates and last fall’s government shutdown have been a drag on businesses. As a result, they remain slow to hire, he said.
“Caution is really the accumulation of four (or) five years of volatility and a rather slow recovery,” he said. “That’s not going to turn around immediately, and businesses are more or less playing it safe.”
Teshome said 2014 should be better for the economy. No major tax increases are in the offing, the global economy is performing better, and consumer and business balance sheets are stronger, he said.
Area enterprises that participated in the survey say their business has gotten stronger.
At family owned Conte Remodelers, which operates primarily in the Marion and Delaware areas, customers are starting to spend money again, said Michael Conte, general manager. And they’re taking on kitchen remodeling and home additions because they want to, he said, not because they have to.
“That’s what was absent in the past, and that’s caused a little more confidence in us,” Conte said.
The effects of an improved economy also are in evidence at Lancaster Pollard Mortgage Co. in Columbus, said Carl Wagner, senior vice president.
The mortgage-banking company, which helps finance projects for apartment complexes, hospitals and assisted-living facilities, has been growing rapidly. Its staff has doubled in the past five years, to about 100, he said. The company even has taken over a second floor of the Downtown office where it is located.
Wagner credited the company’s growth to market conditions, coupled with a more-aggressive sales strategy.
“We’re doing very well,” he said. “Things are stable. Interest rates are stable. That’s always good for us.”