ANDERSON, Indiana Business experts have been agitated for decades about how to interpret the nation’s major economic indicators, but maybe not to the same level as in the previous year.
On the one hand, persistent inflation, the Federal Reserve’s string of interest rate hikes, and dramatically rising prices for consumer goods create a grim picture of an economy on the verge of recession.
In contrast, companies have, for the most part, maintained a high employment and pay growth rate in order to fulfil ongoing demand.
Many economists are confused by the contradictory statistics, but a recent study from PNC Bank indicates that small company owners are oblivious to the uncertainty and are optimistic about the future of their companies.
The annual Small and Mid-size Business Owners Survey by PNC Financial Services Group indicated that almost six in ten small and mid-sized business owners are “very positive” about their firms’ prospects over the next six months. About two-thirds anticipate an improvement in the country’s business climate during the same time frame.
Clayton Whitson, president and CEO of the Madison County Chamber of Commerce in Anderson, Indiana, stated, “I’d say that these percentages represent the local opinion as well.”
“It is undeniable that inflationary pressures are diminishing. According to Gus Faucher, chief economist for the PNC Financial Services Group, “companies are finding it easier to get materials and services, inventory levels are returning to normal, and they expect inflation to moderate,”
Despite the tight labour market, labour prices continue to be an issue.
The PNC study also revealed that price pressures are easing for small company owners. Less than half of them foresee a rise in supplier costs, and just 21 per cent anticipate consumer price rises of more than 5 per cent throughout the economy as a whole.
Similarly optimistic is the view of a number of local small company owners.
Here, we are really hopeful. Gloria Dunaway-Harlett, co-owner of Seasons of the Heart Gift Store in Anderson, Indiana, stated, “We’re feeling fantastic.” “We’ve been busy. This winter has been favourable for us.”
In the second part of last year, Dunaway-Harlett and co-owner Nancy McCafferty were obliged to boost prices, but shipping costs have decreased, allowing them to pass on savings to clients.
She remarked, “I have visited with all of my merchants for our winter sales, and they have reduced shipping costs.” This year, we have received a significant amount of freight from the same companies without seeing any price hikes.
At least in part, according to Whitson, the seeming duality in several sets of economic data is the result of the unusual shock waves that swept through the economy during and after the epidemic.
“I’m not sure that our economy has ever seen a comparable era,” he remarked. There are no precedents for what we have experienced with the epidemic, its problems, and how we have handled them.