SunTrust Banks, Inc. has released their annual Business Pulse Survey, in which small and mid-sized businesses executives were found to have a distinct increase in optimism in both the global and U.S. economic strength, shifting from half of the businesses surveyed in 2017 rating the global economy as neutral, to only about a third (36 percent of small and 34 percent of mid-sized businesses) in 2018. Additionally, just 30 percent of both small and mid-size businesses see the domestic economy in neutral terms, a 21 percent decrease for small businesses, and 9 percent decrease for mid-sized. 60 and 70 percent of these small and mid-sized businesses view the next six months with opportunities for global economic growth, respectively.
Though current domestic unemployment hovers at just over 4 percent, one of the lowest levels in a decade, nearly half of executives surveyed rank attracting and retaining employees as their top challenge of 2018. However, the survey found that 62 percent of these businesses have confidence in the strength of the U.S. economy, with 79 percent remaining optimistic about their own company strength. The top three contributing factors impacting business performance are cited from the survey as employee morale, a shortage of skilled labor, and higher than average turnover.
Businesses are looking at strategies to combat low employee morale, such as offering new employee benefits to sharing tax reform proceeds. About half of the companies surveyed already offer such programs, and among those that do not, 23 percent of small and 27 percent of mid-size businesses plan to incorporate these strategies into their plans for the future.
More than half of mid-market and small business leaders believe that the 2017 Tax Cuts and Job Act will have a positive impact and plan to invest money back into the company and/or reward employees with bonuses, raises, or other benefits. About two-thirds of leaders expect to see a positive impact on their businesses from this legislation.
In reporting its results, SunTrust coined the term “acquihiring,” to mean “acquiring skilled talent. The report found this to be a driver of mergers and acquisitions transactions this year.
Business leaders cited additional important goals for this year to include growing revenue, increasing profitability, and reducing expenses. Likewise, other obstacles affecting their firms were noted as an unstable economy, new or increased competition in their sector, and a lack of capital as significant barriers. Overall, the survey indicates businesses are looking forward to this year—and the next five—as an opportunity for growth both domestically and globally.