PITTSBURGH (TNS) — America’s small and mid-sized business owners are feeling good about the road ahead — not just for their own companies, but for national and local economies, too. But some signs of uncertainty also populate the otherwise bullish numbers.
PNC Bank’s latest survey of small and mid-sized business owners found that 78% of owners have high hopes for their own businesses, which is near the all-time high of 79% for the survey, recorded a year ago.
“The latest results … demonstrate the U.S. economy remains in solid shape in the spring of 2025, with continued strong demand and a good labor market,” said Gus Faucher, chief economist at PNC Financial Services Group.
Yet, while business sentiment remains strong, inflation expectations tell a more complicated story.
The University of Michigan Survey of Consumers reports that as of February, long-term inflation expectations have ticked up in recent months, staying higher than pre-pandemic levels, but still below the peaks seen during the post-pandemic surge.
Uncertainty is in the air, according to the Survey of Consumers, especially with potential policy shifts brought on by the new presidential administration.
Now in its 23rd year, the PNC survey found 50% of owners are optimistic about the national economy hovering just under the survey-high levels recorded last fall, while a majority — 56% — are optimistic about their local economy — a drop from 63% a year ago.
Higher revenue businesses are among those more likely to be optimistic about the national and local economy as well as prospects for their own business. This same tier of business owners is most likely to anticipate increasing sales in the coming months and to expect to see an increase in profits in the next six months.
“Demand from both consumers and businesses is increasing, driving solid gains in revenue and profit across industries,” Mr. Faucher said. “The U.S. economy should continue to expand through the rest of this year and into 2026, supporting all and mid-sized businesses.”
Manufacturing and construction sector businesses are among those most likely to expect sales increases while services businesses are least likely to expect an increase, PNC said.
Other findings in the PNC survey found inflation is the predominant concern among business risks for owners, with more than four in 10 — or, 43% — extremely concerned, unchanged from six months ago and more than double the levels from last spring when 20% were extremely concerned.
Just over half (53%) of business owners plan to increase prices in the next six months, a drop from last fall (61%) and approaching the level from a year ago (47%). Two in 10 businesses plan to raise prices by 5% or more, about half as many as last fall [38%].
About 15% of business owners expect to increase the number of full-time employees in the next six months, similar to the level last fall (18%)but less than a year ago (21%).
About a quarter (26%) of business owners are expecting their cash reserves to be lower next year than they are now, up significantly from last fall (17%) and a year ago (7%).
