What pandemic? What economic downturn? What hiring crisis?
The heads of medium-sized businesses not only said they are optimistic about the next six months — they said so in record numbers.
Nearly 9 in 10 business leaders (88%) are optimistic about their company’s performance for the next six months, the highest percentage recorded in 11 years of the survey, and up from 56% one year ago, at the height of the pandemic in the U.S.
Survey participants are also feeling confident about the industry they’re in: 82% are optimistic about their industry’s performance, a significant jump from 45% a year ago.
This rising confidence extends to the broader economy, as well. Three-quarters of respondents are optimistic about the local (76%) and national economy (75%), each representing an increase of at least 40 percentage points from a year ago. Optimism about the global economy, which has traditionally been more muted, is at its highest level (53%) since 2018, up from just 17% last summer.
The rosy outlook is driving ambitious growth plans for companies: The majority (80%) anticipate a rise in revenue/sales and close to half (46%) expect to increase investments in capital expenditures, up from 18% one year ago. In line with these growth plans, nearly 4 in 10 businesses (38%) expect an increase in credit needs for the remainder of 2021.
Jim Glassman, head economist, JPMorgan Chase Commercial Banking, said company heads clearly are looking forward.
“After enduring the challenges of the last year and a half, businesses are feeling overwhelmingly positive about what’s ahead,” he said. “The focus now is on navigating growing pains to harness the momentum of the economic recovery, which is comparatively a good problem to have.”
Among the findings …
Pandemic-related changes are here to stay:
- Introducing new offerings: The majority (61%) have diversified and strengthened their offerings by delivering new product and service lines, with many planning to maintain these products and services post-pandemic.
- Digitizing operations: 39% of businesses expanded their e-commerce capabilities as more customers shopped online, and 38% digitized their accounts payables and receivables processes to boost efficiency.
- Expanding geographically: In addition to reaching customers via new digital channels, 38% of businesses expanded into new geographic markets.
- Supply chain issues: Companies report having to utilize new suppliers, digitize back-office functions and manage their supply chain remotely, with many of them planning to maintain these changes in the future.
- Labor market: Businesses are also contending with the reality of a tight labor market, as the large majority (81%) hope to hire more workers in the next six months, especially as large numbers of experienced baby boomers retire.
- Cybersecurity: One-third of companies report being directly impacted by a cyberattack or fraud since March 2020. Among the businesses that have experienced attacks, 79% say employee education and training has been the most helpful mitigation tactic, and 56% say proactive countermeasures, including deploying new technologies, have been beneficial.