Middle-market executives are more optimistic about the economy and their company’s performance than ever before, according to a new study from JPMorgan Chase.
Eighty-two percent of respondents said they expect higher revenue and sales in 2018; 64 percent plan to increase the hiring of full-time employees; and 76 percent plan to increase compensation packages, according to the report. Also, 83 percent of business leaders are at least somewhat concerned with finding qualified employees to grow their workforce.
The combination of tax and regulatory reform during strong economic growth, may be responsible for the spike in optimism, according to the report.
Sixty-nine percent of respondents are confident in the global economy; 89 percent are confident in national economy; and 75 percent are confident in the local economy. Of companies who expect to benefit from the latest tax reform, 30 percent said they would increase company spending because of the tax benefits; 44 percent plan to pay down debt; and 43 percent plan to invest in capital expenditures.
Executives also plan to make changes to company spending as a result of extra cash flow from recent tax changes including, increase employee wages (33 percent), pay shareholder dividends (24 percent), increase hiring (22 percent), pursue mergers and acquisitions (18 percent), and repurchase shares (3 percent), according to the report.
Business leaders are twice as optimistic about the global economy than in 2017, according to the survey. Forty-nine percent said they are putting money back into their foreign locations and paying down foreign debt. Only 12 percent of respondents said they plan on bringing foreign earnings back to the U.S., according to the report.
“We are now in the second year of synchronized global economic growth. Our clients are more optimistic about the future, as reflected in improved consumer sentiment and growth in capital expenditures globally. That’s why we expect them to invest overseas, both organically and opportunistically” said Morgan McGrath, head of international banking at JPMorgan Chase.
The survey is based on responses from 1,685 senior executives in various U.S. middle-market companies, according to JPMorgan.