Ohio’s small-business owners are only slightly more optimistic heading into the next six months than they were in the fall, as their economic outlook has been tempered by federal spending cuts, government regulations and an unstable global economy.
At least that’s what a survey from PNC Financial Services found when it conducted 1,718 interviews nationwide with small- business owners between January and February.
Of the 152 interviews conducted in Ohio, Europe’s debt crisis and the federal government’s plan to cut $85 billion in spending as part of its sequestration plan have business owners wary of their economic prospects in the coming months.
Still, the survey shows a slight improvement from the fall, when owners were concerned about the more than $500 billion in potential spending cuts and tax increases known as the fiscal cliff that threatened the national economy.
Even though the U.S. Congress was able to head off the fiscal calamity and agree to a more-balanced approach, plans for hiring, borrowing and capital expenditures have been pared — despite a resurgent housing market and a private sector that slowly is adding jobs.
Just 1 in 7 small businesses, or 14 percent, in Ohio plan to add full-time employees in the next six months, according to the survey, a mark lower than last fall when 15 percent had hiring plans.
Still, 21 percent claim they are more optimistic about their businesses’ potential in the coming months, an improvement from 17 percent last fall.
At the same time, business investment plans were mixed, with 52 percent planning to spend on capital investments such as new technology or equipment in the next six months. The trend is up slightly from last fall, when it stood at 50 percent and down from spring 2012, when 64 percent of owners intended to spend more.
However, 20 percent of small-business owners plan on taking out a loan or line of credit in the coming months. That’s up from 11 percent last fall and 17 percent in spring 2012.
A majority of small- business owners in Ohio believe the American Taxpayer Relief Act, passed during fiscal-cliff negotiations in January, will hurt their business. About 42 percent of owners said they believe the legislation, which eliminated a payroll tax , will negatively impact operationsp if families and individuals reduce spending.
The survey has a sampling error of plus or minus 8 points.