Owners of small to mid-size businesses are more confident about their prospects, but they see little improvement in the broader economy and are worried about inflation and higher energy costs. A PNC economist expects optimism to grow at small companies throughout 2011.
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Small business owners in Ohio feel more enthusiastic about their prospects for hiring, selling products and turning a profit than they did last fall, according to a survey by PNC Financial Services Group Inc. But small to mid-size companies are concerned about inflation and energy costs, and some businesses expect to hike prices to preserve their profits.CLEVELAND, Ohio -- The state's small-business owners feel more enthusiastic about their prospects for hiring, selling and turning a profit than they did last fall - but those threads of optimism don't extend to the broader U.S. economy.
A recent survey by PNC Financial Services Group Inc. found that owners of small to mid-size businesses are shaking off some of their recession-induced fears.
Still, businesses in the Buckeye State and across the country are worried about inflation and higher energy costs, and some companies expect to hike prices to preserve their profits.
"Our business has improved, but the economy has not gotten any better," said Dave Czehut, vice president at JRM Chemical Inc. in Garfield Heights. "I see it out in the marketplace when we do trade shows. . . . I think the market's worse off than it was six months ago, but I don't want to be the bearer of doom and gloom."
JRM, one of 151 Ohio companies included in the survey, makes products that reduce erosion and cut down on the amount of water plants need. Tight municipal budgets and the weak housing market are hurting sales to large commercial nurseries and local governments, but the 11-employee company is busier with exports and partnerships with large retailers that resell JRM products under private labels.
The PNC survey, conducted twice a year, included 1,445 telephone interviews nationwide between Jan. 31 and March 4. In Ohio, 34 percent of owners said their businesses were not hurt by the recession or have already improved, while 32 percent expect improvement within a year. Yet 86 percent of them said the nation's economy is not making noticeable headway, and 62 percent said recovery is at least a year away.
Robert Dye, a senior economist with PNC, said small business owners have a good sense of how their companies will fare during the next few months. Their perceptions about the national economy, however, are slower to change.
"I think the report actually bodes very well for economic growth for the remainder of this year," he said. "This economic recovery, through the first 20 months, really focused on large companies. . . . Now we're seeing that move to small businesses."
Private companies added 201,000 jobs from February to March, with more than half those positions coming from small businesses, according to a Wednesday report from Automatic Data Processing Inc., a company that handles human resources, payroll and other services for companies.
The Labor Department said Thursday that fewer people applied for unemployment benefits last week. March unemployment data will be released Friday.
Though 15 percent of the Ohio businesses in PNC's survey expect to hire more full-time employees in the next six months, Spee-D-Metals Inc. of Willoughby hopes to manage any new business with its 20-person staff. The company sells raw materials, primarily metal, that end up in everything from appliances to vending machines to cars.
"We've got a pretty lively crew here that's willing to soak up some overtime," said Paul Dannemiller, the company's vice president and a survey respondent. "It's too expensive to hire people."