More than 50 percent of the 3,500 businesses surveyed expect to increase sales and profits this year. Seventy-four percent of middle-market respondents project a sales increase, compared to 60 percent of small businesses.
While 64 percent of middle-market respondents expect an increase in profit this year, only 55 percent of small businesses expect profits to rise.
Rising taxes and pending healthcare regulation have led many businesses to remain cautious about the economy. More than one-third of respondents said they were optimistic about the national economy, though middle-market companies are 12 percent less optimistic than last year. Small businesses are also nearly twice as likely to hold a pessimistic view of the national economy compared to mid-sized businesses.
More than 50 percent of all respondents, however, indicated a positive view of their local economy, and more than 70 percent of respondents said they had a bullish outlook for their performance.
“It is a good sign that we are seeing businesses remain confident about their own performance and local economy, despite facing broader economic challenges,” Doug Petno, the CEO of Chase’s commercial banking unit, said. “Business leaders feel better about things they can touch and control.”
Most businesses have remained cautious about borrowing, and new financing will primarily go towards capital equipment and working capital as business owners focus efforts on expanding products and services, cross-selling to existing clients and attracting new customers.
Fifty-five percent of mid-sized firms said they plan to hire new employees, with only six percent indicating they plan to cut back on employees. Thirty-one percent of small businesses plan to hire new employees, while four percent plan to reduce their workforce. More than 85 percent of all respondents attribute their plans to add new staff to an expected increase in sales.
Though 66 percent of middle-market respondents expect a modest increase in employee compensation, 60 percent of small businesses expect employee compensation to remain flat.