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Small business customers upbeat in M&T survey

Small business customers of M&T Bank feel pretty upbeat about the economy.

Thirty-nine percent of respondents to a bank survey expect the economy to moderately improve in the next six months, while 36 percent expect it to remain stable. M&T polled businesses with annual sales of up to $10 million, from around the bank's footprint.

The bank conducted the survey during the fourth quarter, and there was a notable difference between the answers from respondents who answered before the presidential election and after it. Prior to the election, only 25 percent of respondents said they expected the economy to moderately improve in the next six months; that percentage jumped to 53 percent among the post-election respondents.

Overall, 41 percent of the respondents said they expected to increase capital expenditures over the next six months, 30 percent said they planned to hire additional workers. "But there is still a level of caution in place, and still concern around the existing regulatory infrastructure, as well as some uncertainty in everything from tax code to health care policy," said Eric Feldstein, head of business banking.

Clarity and certainty are significant issues for small business owners, Feldstein said. "A level of uncertainty will delay hiring of new employees, capital expenditures, launching of new product lines, so finding a level of certainty for small business owners is good for their business and good for the Western New York economy."

Darren King, M&T's chief financial officer, touched on the survey results during a conference call this week with analysts.

"When we would ask our customers what was their biggest issue or hold-back in investing, it was business regulation, employee benefits and access to people, meaning qualified labor to grow their business," King said. "So those would be the things that were kind of on the minds of our customers when thinking about expansion and looking for lending. It's not really been about access to capital or pricing."

Seventy-four percent of the respondents said they had difficulty finding qualified experienced applicants. And 45 percent said they would consider reducing workforce, hiring or new capital investments in response to increases in the minimum wage.

About 300 M&T customers responded to the survey from across M&T's territory. While the bank has surveyed its larger customers before, the survey of smaller customers was new. Feldstein said M&T plans to keep surveying those customers on a regular basis, perhaps every six months or every year.



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