While top U.S. business executives are taking a pessimistic view of the national economy, most remain optimistic about the performance of their own companies. Over 1,500 business leaders expressed their opinions for JPMorgan Chase’s 2022 Business Leaders Outlook Pulse survey, released in July.
The executives head midsize companies with yearly earnings between $20 million and $500 million. Their responses show increasing caution over the U.S. and world economies due to inflation, rising interest rates, labor shortages and ongoing supply chain issues.
The business leaders, who answered questions between May 25 and June 10, place inflation as their top concern. The U.S. inflation rate hit a 40-year high in June at 9.1% before cooling slightly to 8.5% in July. Here are some of the key points from the survey:
- Only 19% have a positive feeling about the national economy, the lowest percentage in over a decade and down from 75% last year
- 71% say they remain confident in their own companies, and 55% are hopeful about their industry’s performance
- 73% expect revenue to grow this year, but only 57% expect profits will rise due to increased operating costs
- 71% say inflation remains the biggest challenge, followed by labor issues, including recruiting, hiring and retaining workers
- 99% report operating costs have risen in the past six months
- 100% say they are facing business challenges
A spokesperson for JPMorgan Chase says the survey shows that while perceptions may have drastically changed in the past year, business leaders generally have a positive outlook for dealing with challenges where they have some control.
Most retain plans for growth
More than four of five executives say they expect to expand their businesses in the next year. Nearly two-thirds plan expansions in the U.S. or across the globe. Over half say they will continue spending on product innovation and plan to offer new products or services.
With the cost of doing business rising significantly in the past several months, 76% said they have or will be raising prices, and 42% say they expect their buyers and customers will absorb about half of their added costs. The head of JPMorgan’s middle market banking services says many companies appear to be shifting strategies but are still taking risks to expand and upgrade products.