By many quantitative measures, the U.S. economy remains strong, amid solid growth and low unemployment. But are these data points reflected in what executives running America’s mid-sized businesses think and expect for the future?
SunTrust’s annual Business Pulse Survey contains insights gathered from leaders at more than 500 companies with revenues between $5 million and $250 million. Here’s what they had to say about everything from tax reform to a potential recession.
Feats of Economic Strength
- 56% of executives at mid-sized businesses see the U.S. economy as either somewhat or extremely strong (a six-point decline from 2018)
- 53% rate the global economy the same way (a 10-point decline from 2018)
- Business leaders are more confident about their own firms, with 73% rating them as somewhat or extremely strong (versus 81% in 2018)
- Most companies are optimistic, with 59% expecting the U.S. economy to be in somewhat or much better shape in six months
- An even higher share—69%—believe business conditions will be somewhat or much better in six months
Tax reform reinvestments:
- Half of businesses invested excess cash resulting from the recent U.S. tax reform back into their firms
- 37% paid down company debts
- 35% rewarded employees and 30% hired additional employees
- Half of executives named the possibility of a recession occurring this year as one of their top three economic concerns
- 46% listed the challenge of attracting and retaining employees
- 45% of executives included the impact of rising interest rates
Those concerns add up. In fact, businesses cited an unstable economy as the biggest obstacle standing between them and their goals of increasing revenue and profitability, as well as reducing debt and expenses.
Responses to a Tight Labor Market
Competing for the best and brightest:
- Almost every company surveyed—93%—is acting now to attract and retain employees
- 45% increased wages
- 43% increased benefits
- 31% of companies are training current employees to fill vacant positions, offering workers a chance to move up
Encouraging financial well-being:
- 62% say companies should take a role in promoting financial wellness among employees
- 51% offer financial wellness programs
- 49% say financial stress has impacted their workforce
- 33% of mid-sized businesses plan to introduce a new product or service within the next five years to enable growth
- 30% will enter a new consumer or business segment
- 24% will make a major capital investment
Look for historical analysis of the Business Pulse Survey results coming soon for insights into how opinions, challenges and opportunities have evolved in the past five years.