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Hopes slipping among state business owners

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A survey of Hoosier business owners shows an increasingly ho-hum outlook, with only one in seven optimistic for their own company and even fewer optimistic about the U.S. economy.

Those are some of the conclusions from a twice-yearly survey sponsored by Pittsburgh-based PNC Bank. The phone survey was conducted from July 23 through Sept. 7 and included 154 business owners from Indiana. The survey has a margin of error for Indiana of plus or minus 8 percent.

Among those small- and medium-sized businesses, 52 percent plan to make capital investments over the next six months, down from 66 percent who planned to do so in April, when the same PNC survey was last conducted.

The same trend showed up in PNC’s nationwide results, from interviews with 1,700 business owners.

Optimism appears to be lower in Indiana than the nation as a whole. Only 14 percent of Hoosier business owners said they were optimistic about their own company’s prospects during the next six months, compared with 23 percent nationally. The Indiana number was also down from 21 percent who said they were optimistic in the spring.

“I’m looking at Indiana right now as riding out, bearing the brunt of yet another slowdown, another deceleration in the national economy,” said Kurt Rankin, an economist at PNC Bank who covers the Midwest. But, he added, he expects the Indiana and Midwest economies to start improving modestly in early to mid-2013: “There are just a few more months for manufacturing-heavy states to endure of the national uncertainty and unwillingness to spend.”

Because of that, Rankin expects Indiana to see unemployment rise for another month or two and then to level out until the second quarter of 2013. In August, the latest month for which figures are available, the unemployment rate in Indiana was 8.3 percent, with 260,000 people looking for work.

Nationally, the unemployment rate fell in September to 7.8 percent as the economy added a modest 114,000 jobs. About 12 million Americans still can’t find jobs.

By early next year, three large clouds will clear—or at least thin out. First is the presidential election, which is just a month away. Related to the election is whether President Obama’s health care law—which will impose new costs on employers—will be cemented by his re-election or likely scaled back after a victory by Republican challenger Mitt Romney.

About one-third of Hoosier business owners think the Patient Protection & Affordable Care Act will hold back their hiring over the next year. Nationally, 42 percent of business owners think the same.

The last cloud to be cleared is the so-called “fiscal cliff” that is scheduled to hit Jan. 1 as several tax cuts all expire at once. No matter who wins in November, Obama and the lame-duck Congress will have to figure out at least a short-term solution to a sudden hike in numerous taxes.

“Until those longer-term planning issues are resolved by this election,” Rankin said, “I expect no change in hiring until maybe second quarter.”

Indeed, only one in five Hoosier business owners expects to hire new workers in the next six months, slightly less than the proportion nationally that do.

 

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  • REALLY!
    MarkusR If the Democrats would just get out of the way then the Republicans could get some real business done. Same ol' Same ol'. It works both ways. It's called Democrazy ... Ain't it great?!
  • jobs
    Do people realize how tough it is to open a business in Indiana? The state makes it so hard with inspections, rules, licensing, guidelines... I understand their should be but come on... Enough is enough!!! A small business should be easier to open. Of course depending what kind. For instance, i have a small empty 600 sq ft building that i just wanted to sell hit dogs, chips, drinks etc. Nothing big like frying or cooking maybe cold cut sandwiches. Omg the things they required Im not talking safety or sanitary issues Im talking just to set up so now the building is still empty.
  • Cure All
    The most effective way to grow our economy is give the "job creators" some relief from costly unwarranted wage growth and burdensome labor regulations. Something that could assure workers are not forced into slave-like associations that drain money from them to promote socialist positions. REAL job making policy that will allow everyone to have the RIGHT TO WORK.......... oh, never mind.
  • business
    I agree... I have a small business and its doing great. Not sure who was surveyed but not me. I think most owners spend to much of their money on lavish things they really don't need. They probably have new cars and homes and eat out at fine restaurants. Which they probably deserve but for a failing business owners should wise up.
  • Re: Markus
    No business owner is forgoing profits to make a political point. They either have an economic incentive to expand and hire or they don't.
  • One in Seven?
    If One in Seven Small to Midsize Businesses are looking into a glass that is half empty, they must be living in a hollowed out tree. For months, we have been forced to make reservations for dinner, stand in line at Costco and the grocery store. I find it interesting that auto sales are up, housing prices increasing, and banks willing to provide loans for housing that is appraising higher than at anytime over the last six years. Frankly, my business is doing very well, and I have helped friends start new businesses over the last three years. Perhaps the Small Business Administration's local office can help a few of these companies. If that option fails, trust me, there are one or two of your employees who will gladly step forward after you walk away, create a replacement company where you once stood, and there are people who will step forward to help new start-ups grab the brass ring. I see a glass half full, and considering that we entered a major recession, perhaps even a depression in 2008, I believe the future is much brighter than all of these whiners suggest. Frankly, I do not think about Washington or the State House every morning. All I think about is our employees and our customers, the rest is just noise.
    • Political feelings not helping
      There is no argument that most small & medium size business owners are Republicans. Not just by some careful annual reconsideration, but because that's how the society is setup. The communities for entrepreneurs involve deep seethed dislike of Democrats that goes beyond any specific policy. Unfortunately that is hurting us. The Democratic president has attempted all sorts of cures of the unemployment and consumer spending ills, but the same attitudes about party membership that convinced some business owners to take a negative outlook of future, have been expressed by Republicans in Congress as they have stopped every attempt by the President to reduce the unemployment and get the economy going again. I have no qualms about someone hating a particular politician because of the policies they are after. But the attitude against the President and against a growing economy is drive by political partisanship that no legislative action can reverse. Which is a shame. The economy could do so much better if some of these business owners didn't have a politically motivated demotivation towards economic growth.

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