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Internet Advertising: Viral Ads
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Using Viral Advergames For Worldwide Advertising and Marketing
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Internet Marketing and Viral Marketing Techniques
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Video Email And Its Impact On Internet Marketing
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Most U.S. Business Owners Expect Little Boost from Fiscal Stimulus Package and Weakened Outlook

Pittsburgh, PA (PRWEB) April 3, 2008 -- Despite lower interest rates and adoption of the federal fiscal stimulus plan, the outlook among the nation's small and mid-sized business owners has fallen to record lows in the six-year history of the PNC Economic Outlook survey, according to new findings.

Only 6 percent of business owners are optimistic about the U.S. economy over the next six months, a record low for the semiannual survey that began in April 2003. An unprecedented 19 percent also expect their profits to decrease in the near term. Asked about their top concerns, the possibility of recession is No. 1, chosen by 36 percent, while higher energy prices are second (30 percent).

The national economy's woes are beginning to significantly impact the outlook for small and mid-sized businesses, according to PNC's new spring findings. The survey gauges the mood and sentiment among small business owners, who represent the bedrock of the American economy.

"The inherent optimism we have found among these business owners is absent in these new findings, reinforcing our view that the U.S. economy is falling into a short and shallow recession for the first half of this year," said Stuart Hoffman, chief economist for the PNC Financial Services Group, Inc. (NSYE: PNC).

Stimulus Plan: Boost Or Bust?

The majority of owners are also doubtful that the federal fiscal stimulus plan will boost their business, PNC found. More than six in 10 (63 percent) expect to see 'little to no benefit' from the package. Regionally, owners in the Midwest are the most pessimistic as only 8 percent expect to benefit, followed by the West (11 percent) then Northeast and South (both 19 percent).

Among the one out of three (35 percent) that expect to see some benefit, the expectation is higher among owners of wholesale and retail companies compared to manufacturing and service firms.

Hoffman countered that the stimulus package, coupled with the Fed's most recent interest rate cuts and injection of liquidity into the markets, will be a 'fiscal shot of adrenaline to help lift economic and job growth in the latter half of this year.'

Key Findings: Cost Pressures, Pricing Power

Consistent with their fears of recession, business owners are less optimistic about the performance of their company during the next six months. About one in five (19 percent) expect their profits will decrease in the near term, a record high for the survey.

Likewise, one in 10 (10 percent) expect to reduce the number of full-time employees, while two-thirds (66 percent) say there will be no change in employment levels over the next six months.

PNC also found:

- Cost Pressures: Cost pressures remain a concern for the majority, but there is less pressure from employee compensation and benefits. Nearly two out of three (61 percent) expect to pay higher prices to suppliers, which is little changed from our two previous surveys. Only (38 percent) expect an increase in employee compensation over the next six months. Fewer employers (50 percent) are expecting higher healthcare costs.

- Selling Prices: A stable 43 percent plan to pass along some portion of their higher costs in the form of higher selling prices to customers. Of those who plan to raise prices, nearly one-quarter (24 percent) report favorable market conditions will allow it while three-quarters (73 percent) are attempting to preserve profit margins.

"The outlook for business pricing power remains stable, which reinforces PNC's forecast that consumer price inflation will slow down in the latter half of the year, especially as energy and other commodity prices and the U.S. dollar stabilize," Hoffman said.

- Credit Availability: Nearly one out of five (18 percent) business owners - compared to 10 percent in the autumn - say it is more difficult for them to obtain credit recently than it was three months ago. Only one out of seven (14 percent) business owners say that it is easier to get credit now. Plans for capital spending have declined across a broad range of industries.

- House Prices: Nearly half (48 percent) expect house prices in their area to decrease during the next 6-12 months compared to 43 percent in the autumn. Among those who expect a decrease, a growing amount say the decline will have a negative impact on their business, calling for them to reduce the number of full-time employees and limit capital spending.

To participate in the webinar featuring Hoffman or for complete details of the national and regional findings, along with a replay of the webinar, visit www.pnc.com/eos.

Methodology

The PNC Economic Outlook survey was conducted between late January and late February by telephone within the United States among nearly 1,000 owners or senior decision-makers of small and mid-sized businesses with annual revenues of $100,000 to $250 million. The results given in this release are based on interviews with 500 businesses nationally, while the remaining 457 interviews were conducted among businesses within the states of Maryland, New Jersey and Pennsylvania. Sampling error for the national results is +/- 4.0 percentage points at the 95 percent confidence level.

The survey was conducted by Artemis Strategy Group (www.ArtemisSG.com), a communications strategy research firm specializing in brand positioning and policy issues. The firm, headquartered in Washington D.C., provides communications research and consulting to a range of public and private sector clients.

The PNC Financial Services Group, Inc. (www.pnc.com) is one of the nation's largest diversified financial services organizations providing consumer and business banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services.

This report has been prepared for general informational purposes only and is not intended as specific advice or recommendations. Information has been gathered from third party sources and has not been independently verified or accepted by The PNC Financial Services Group, Inc. PNC makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. PNC cannot be held responsible for any errors or misrepresentations contained in the report or in the information gathered from third party sources. Any reliance upon the information provided in the report is solely and exclusively at your own risk.

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This press release has been reprinted from PRWEB per the terms and conditions of the copyright notice.

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