Ohio small and medium-size business owners have a less favorable outlook for the local economy going into next year than they had just this past spring, a new survey shows.
That’s not surprising given the current economic slowdown combined with lots of uncertainty regarding tax policy, health-care reform and the pending presidential election, said Mekael Teshome, economist for Pittsburgh-based PNC Financial Services Group, which conducted the survey.
Even with the latest decline in optimism, the survey showed Ohio business owners’ outlook is better than PNC’s similar survey conducted a year ago.
“Nothing alarmed me” regarding the latest Ohio survey results, Teshome said.
“What we’re seeing here is a little bit of tempered optimism versus the spring,” he said. “Ultimately, the fundamentals of the economy are improving.”
Nationally, just one in four small businesses surveyed said they planned to hire in the next six months.
The PNC Economic Outlook autumn survey for Ohio, released Thursday, showed:
• Sales, profits and jobs outlooks for the next six months are somewhat weaker than in the spring survey. Some 44 percent of business owners seek greater productivity from employees.
• Owners are slightly more optimistic about their own businesses. There were 20 percent surveyed who are optimistic about their own prospects for the next six months compared to 17 percent in the spring and 18 percent a year ago.
• There is reduced interest in taking out new loans or lines of credit. “That tells us business is hunkering down,” Meshone said.
• There were 38 percent who plan to raise prices, while 5 percent plan to cut prices.
• Half of business owners plan to spend on capital investments, primarily on technology equipment, in the next six months, down “significantly” from 64 percent in the spring. “That’s like a safe bet. It lets them do more with less,” Meshone said.
• There were 49 percent who said they are worse off now than when the Great Recession officially started in 2007. Some 19 percent said they are better off now, while 31 percent said things are about the same.
• There were 39 percent of business owners who said the Supreme Court’s ruling upholding the new federal law called the Affordable Care Act will hurt their hiring plans going into next year.
• There were 30 percent of owners who expect home prices in their local markets to increase, with 15 percent expecting a price decline. A year ago, 40 percent of business owners expected home price declines, with 12 percent expecting rising prices.
PNC interviewed 150 Ohio business owners from July 23-Sept. 10. The survey has a sampling error of plus or minus 8 percent. Nationally, 1,710 businesses were surveyed.
Vito Sinopoli, co-owner of Akron high-end home builder Sinopoli Construction, took part in the survey.
“We’re not where we were,” Sinopoli said. “But we’re better than three or four years ago.”
His small family-owned business, which he runs with his brother, specializes in building homes with prices typically ranging from $500,000 to more than $1 million. He said that while he and his brother are general contractors, they are carpenters by trade and typically are on the job sites. They get most of their business through word of mouth, he said.
When the recession hit, which particularly hurt home construction, Sinopoli said they expanded into building additions and doing renovations and remodeling.
“We’re seeing more and more inquiries from people interested in building homes,” Sinopoli said. “From my vantage point, a small-business owner, I hope the worst is behind us.”
Trades such as plumbers and electricians are telling him that they are busy, he said. That’s a good sign for the economy, he said.
“They’ve scaled back in the amount of employees. But they are seeing an uptick,” Sinopoli said.
“The home industry is improving. Home values are increasing, which is a good sign,” he said.
PNC’s Meshone said that the issues that caused the Great Recession are being corrected.
“The next step is to kick it into higher gear,” he said.
Information about the Ohio and national economic surveys can be found online at http://pnc.mediaroom.com.
Jim Mackinnon can be reached at 330-996-3544 or firstname.lastname@example.org.