Nearly one in three U.S. small business owners plan to add new employees over the next six months as their optimism returns to levels unseen since before the Great Recession, a new survey shows. But many fear that a lack of skilled workers may throw a monkey wrench into their plans.
Small business expectations for sales and profits have rebounded from near-historic lows last fall and business owners have growing optimism about the U.S. economy and their own company's profits, according to a biannual economic outlook survey conducted the PNC Financial Services Group, a financial services organization. Nearly three in four (70 percent) plan to invest in their business in the next six months.
The survey, which gauges the mood and sentiment of small- and medium-size business owners, found that nearly six in 10 (58 percent) expect their sales to increase in the next six months, up sharply from last fall (40 percent). Just 10 percent expect them to decrease, which is significantly lower than last fall (20 percent). Profits are also on the rebound, as 43 percent expect an increase compared with 29 percent in the fall.
But potential skills gaps could pose a threat to owners' hiring plans, as almost half (45 percent) say requirements for employees' skills and background are higher than in the recent past. Computer/technical abilities, experience "in the field" and communication skills are the top three priorities.
"With the start of the baseball season, the economic recovery is on base, but heading home, but rising energy prices, elevated unemployment and a recession in Europe could still prevent it from scoring the winning run," said Stuart Hoffman, chief economist at PNC. "These findings show a significant improvement in business expectations and optimism, and thus strongly support PNC's baseline forecast that the U.S. economic and jobs recovery will continue to play ball in 2012-2013."
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