Unemployment Rates

Poll: Small business optimism at record high but consumer confidence plummets

RALEIGH – Small business owners are feeling more optimistic than at any time in the previous 19 years, according to a new PNC survey. But consumers aren’t so excited about the future.

Owners with a higher proportion of employees reporting having been fully vaccinated against COVID-19 are even more optimistic.

The survey, which was conducted throughout August 2021, asked small business owners about measures taken to encourage or require employee vaccination against COVID-19.

Eight in ten business owners said they took at least one step to encourage – or require – their employees to be fully vaccinated against COVID-19, according to the study, and 48% said they required vaccinations against COVID-19. COVID-19. .

Survey results indicated that 53% of business leaders with fewer than 100 full-time employees demanded that their employees receive the vaccine. But for companies with 100 or more full-time employees, only 26% had required vaccination against COVID-19.

“And that was before the Biden administration was in office,” said Gus Faucher, chief economist at PNC Bank, who commissioned the study. “So that number may increase. “

Consumer contrast

The positive news contrasts with that of consumers. US consumer confidence fell for the third consecutive month in September, according to the Associated Press.

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The Conference Board said Tuesday that the consumer confidence index fell to 109.3 in September, from 115.2 in August. The September reading is the index’s lowest level since it dropped to 95.2 in February.

Lynn Franco, senior director of economic indicators at the Conference Board, said consumer confidence is still high by historical standards, but noted that the index has fallen almost 20 months since it hit 128, 9 in June. “These back-to-back declines suggest that consumers have become more cautious and are likely to cut back on spending in the future,” Franco said, according to The AP.

Consumers’ views on the current situation and future expectations continued to worsen as spending intentions on large items like homes, cars and major appliances retreated again, the council said. ‘administration.

Concerns about inflation are also weakening consumer confidence.

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Optimistic business leaders, despite concerns

Despite growing concerns about the Delta variant, labor shortages and inflation, small business owners are optimistic about the future of their business and the future of the economy, according to the study.

And small business owners who reported higher vaccination rates among their employees were more optimistic than their peers, Faucher noted.

“Companies that have the most employees vaccinated feel more optimistic about their prospects,” said Faucher.

“There are different reasons,” Faucher noted. “Presumably, areas with higher rates among employees will also have higher vaccination rates among customers.”

Companies may also think there will be less disruption to their business with a higher share of their employees vaccinated, Faucher said, and may also feel more optimistic, in general.

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“Companies have a better idea of ​​how to react now, they’ve been going through this for over a year,” Faucher said. “They know what they can do to keep their businesses open, they know what they can do to get employees to work remotely, they have procedures in place.”

“They believe that as long as things don’t get worse they can handle the Delta variant,” Faucher said.

And that prompts companies to be optimistic, Faucher noted according to the poll results. In fact, according to the study, business owners’ profit expectations doubled in this survey compared to the previous PNC survey that was conducted in the spring, and sales and demand have reached all-time highs. highest in the investigation’s 19-year history, PNC said in a statement.

“I think the bottom line is that businesses generally feel upbeat,” Faucher said. “They see vaccinations as the key to the economy over the next two years.”

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The economic outlook, from the point of view of SMEs

“North Carolina’s economy is recovering a little faster than what we’re seeing in the rest of the United States,” Faucher said. “In part, that some of the restrictions that we have seen in other parts of the country have not been as severe as in North Carolina,”

“The initial contraction was not as severe,” Faucher noted.

“In August, the unemployment rate in North Carolina was 4.3% while nationally was 5.2%,” Faucher said. “I think it’s fair to say that conditions are improving, and they are improving in North Carolina more than the rest of the country.”

Still, the job market remains tight and small businesses are raising concerns about a labor shortage, Faucher said. “In labor shortages, which are a problem nationwide, given the lower unemployment rate in North Carolina, that’s probably a factor as well,” he said.

Nationally, according to the survey results, about a third of small businesses said they had difficulty finding workers, Faucher said. This is the result of various factors, Faucher noted.

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While 58% of employers said they believed improving unemployment benefits was a root cause, Faucher said it was likely a secondary factor, because in North Carolina there has actually been a drop in employment after the end of the extended unemployment benefits.

Further, added Faucher, “the data I have seen which indicates that states that terminated these benefits earlier have not enjoyed any advantage over other states.”

What could be a primary factor in the job market, Faucher said, are workers’ worries about COVID-19 and the Delta variant.

But other factors could also play a role, he noted, including access to child care and the decision of some workers to take early retirement.

Labor shortages are just one of the challenges business owners report facing.

Another challenge?


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More than half of those polled, or 54%, plan to increase the prices they charge consumers over the next six months, according to the survey. One in three companies cite higher non-wage costs as a reason to expect higher prices, and one in four cite higher wage costs.

Companies also expect their suppliers to increase their prices over the next six months, with 46% stating the forecast. 80% of those polled expect consumer prices to rise this year, and 62% expect an increase of 3% or more, according to the survey.

“SMEs think the prices they charge are going to be higher and the prices they are going to pay are going to be higher,” said Faucher. “Definitely suggests that inflation is on their minds,” he added.

“But I would suggest too, given the optimism we saw in the poll,” Faucher said. “Let them not see higher inflation as a threat to the recovery.

From a small business owner’s perspective, based on the survey results, said Faucher, the greatest risk to economic recovery and an important factor shedding light on the economic outlook is that the Delta variant is spreading. more or that a new variant emerges for which vaccination is less effective. .

“These risks exist,” Faucher said. “Until we really get the pandemic under control and it looks more like the seasonal flu we get every year, the recovery will not be complete.”

(The Associated Press contributed to this report.)

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