Small to mid-sized business owners generally feel good about where the economy is headed, but are still reluctant to invest more in their operations, according to an M&T Bank survey.
Fifty percent of the respondents to the survey said they expected the economy to improve in the next six months, and 55 percent expected the recent tax overhaul to have a positive impact on business performance. But only 34 percent planned to increase their capital expenditures over the next six months, which was lower than the 38 percent who responded that way to a survey in the second quarter.
"Small business owners are optimistic, both within their own business and the industry overall," said Eric B. Feldstein, M&T's senior vice president for business banking. "But with that optimism continues to be a wait-and-see approach around capital expenditures." That seemed to stem from uncertainty around the issues such as the outlook for regulations, health care, and, at the time the survey was conducted, tax policy, he said.
The bank conducted the survey in November with M&T customers across its multistate footprint. That was when debate over the tax overhaul was in the news, but before a plan was actually approved.
Seventy percent of the respondents said they planned to increase wages and salaries this year. But only 26 percent planned to hire more workers in the next six months, compared to 34 percent in the second quarter survey. Sixty-two percent of respondents said they were having trouble finding qualified candidates for jobs.
The survey found that 47 percent of the business owners planned to increase wages by 2 percent or more this year; in Western New York, that figure was higher, at 56 percent.
M&T received 495 responses to its business economic outlook survey. It was conducted over the internet with senior managers and owners of small to midsized businesses, with revenues of up to $10 million. M&T conducts the survey twice a year.