U.S. Businesses Are Optimistic for Growth but Uncertain About Economy
2016 JPMorgan Chase Business Leaders Outlook report reveals positive outlook close to home but levels of uncertainty with National and Global economies
NEW YORK--(BUSINESS WIRE)-- Executives from middle market businesses and small businesses have positive expectations for the performance of their companies over the next 12 months, at 70 percent and 69 percent respectively, according to results from the 2016 JPMorgan Chase & Co. Business Leaders Outlook report released today.
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But their perceptions of the economy as a whole are varied, especially globally with only 10 percent of middle market executives and 27 percent of small business executives expressing global optimism.
"While business leaders admittedly see challenges overseas, they continue to see opportunities at home and anticipate positive growth in international markets over the next few years,” said Jim Glassman, Senior Economist at JPMorgan Chase.
Middle Market Businesses: Survey Results Highlights
-
ExpectationsWhile 70 percent of businesses are optimistic
about their own company’s performance, expecting their revenue/sales
to increase this year (65 percent), they are decidedly less so the
farther they get from home:
- Local economy: 50 percent optimistic, compared to 62 percent in 2015;
- National economy: 39 percent optimistic, compared to 68 percent in 2015;
- Global economy: 10 percent optimistic, compared to 19 percent in 2015.
-
ChallengesThe top challenges facing businesses in 2016
are:
- Revenue/sales growth (74 percent), named by the most respondents in the history of the survey. The retail industry was even higher at 86 percent.
- Limited supply of talent (40 percent), especially in the construction (63 percent) and services (50 percent) industries.
- Managing labor costs (40 percent) which is highest in the West (52 percent).
-
International GrowthDespite challenges and overall global
pessimism, businesses nevertheless project strong international growth
for their companies:
- Among the 60 percent who are globally active, seven out of 10 (70 percent) expect their overseas sales to increase in the next five years.
Small Businesses: Survey Results Highlights
-
Expectations Sixty-nine (69) percent of small
businesses are optimistic about their own company’s performance, with
optimism on the economy strongest closer to home – this is consistent
with sentiment from previous years:
- Local economy: 53 percent optimistic, compared to 55 percent in 2015;
- National economy: 43 percent optimistic, compared to 47 percent in 2015;
- Global economy: 27 percent optimistic, compared to 26 percent in 2015.
-
FinancingFifty-eight (58) percent of small business plan
to obtain financing this year, higher than the 52 percent of 2015. The
top reasons for using the proceeds – for those considering loans of
$100K or less – are:
- Buying and repairing equipment (19 percent);
- Purchasing inventory (18 percent);
- Expansions (15 percent);
- Software and technology (15 percent).
-
ChallengesThe top challenges facing small businesses for
2016 are:
- Growing revenue/sales (48 percent);
- Uncertainty of economic conditions (33 percent);
- Taxes (28 percent).
“The challenges they are facing are certainly significant, yet not out of the ordinary for small businesses,” said Jennifer Piepszak, CEO, Business Banking, Chase. “Their general eagerness to seek financing is a strong sign that they are readying for near- and long-term growth.”
For more information on the 2016 Chase Business Leaders Outlook survey results, visit JPMorganChase.com/BusinessLeadersOutlook.
Methodology
The 2016 Business Leaders Outlook survey was conducted from January to February. A total 1,394 middle market senior decision-makers (annual revenue between $20 million and $500 million) and 950 from small businesses (annual revenue between $100,000 and $20 million) responded to an online survey. The results of the survey are within statistical parameters for validity, and the error rate is plus or minus 2.5 percent at the 95 percent confidence interval.
About Chase
Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), a leading global financial services firm with assets of $2.6 trillion and operations worldwide. Chase serves nearly half of America’s households with a broad range of financial services, including personal banking, small business lending, mortgages, credit cards, auto financing and investment advice. Customers can choose how and where they want to bank: more than 5,300 branches, 15,500 ATMs, mobile, online and by phone. For more information, go to www.chase.com.
About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
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For JPMorgan Chase & Co.:
Nicole Robbat, 561-818-4349
[email protected]
or
Edward
Kozmor, 609-841-5765
[email protected]
Source: JPMorgan Chase & Co.