According to the results of a JPMorgan Chase survey released today, only 19% of business leaders reported optimism about the national economy for the year ahead, the lowest percentage recorded in 12 years of survey data, and down from 75% a year ago. Pessimism about the economy jumped to 51% from 10% a year ago. When it comes to the global economy, only 9% of business leaders were optimistic
Despite dim economic views, executives remained confident in their own businesses. Seventy-one percent were optimistic about their company’s performance and 55% reported feeling “upbeat” about their industry’s performance, though down from 88% and 82%, respectively, one year ago. Nearly three-quarters of survey respondents (73%) anticipated increased revenue/sales for the year ahead. However, the profit growth outlook has been hurt by higher costs, with only 57% expecting increased profits compared to 71% last year.
All of the survey respondents said they’re facing business challenges, citing the higher cost of doing business, including inflation, as their top challenge (71%), followed by labor issues (70%), including recruiting, hiring and retaining employees and labor shortages. More than 7 in 10 business leaders cited increased costs from retaining employees (77%), supply chain issues (74%) and hiring employees (71%), as the main drivers behind these increases.
More than three-quarters of businesses (76%) are raising prices, and 42% have passed along at least half of their increased costs to consumers and buyers in the form of higher prices. This trend is not expected to subside soon, as 81% of respondents said they are likely to continue to increase prices to help mitigate higher costs. Despite continued challenges, 83% expected to grow their business over the next year. While down from the 90% at the end of 2021, more businesses are planning on expanding into new global or domestic markets (63%), and bolstering product innovation (53%), including expanded or new product and service lines, compared to six months ago.