PNC economic outlook sees capital investment increases by NC businesses


PNC Financial Services Group completed its purchase of RBC Bank, based in Raleigh, and the integration of its 415 branches in the Southeast.  Besides planning to hire more than 250 “customer-facing” employees in North Carolina by the end of 2013,  PNC has added the state to its list of bi-annual economic outlooks, beginning this month. The survey focuses on small- and midsize business owners, reports the Winston-Salem Journal.

“We intend to grow in North Carolina and knowing the views and needs of the state’s business owners will help us to serve them better,” spokeswoman Dorsey Tobias said.

The survey found a growing confidence among N.C. business owners about the economy and their expectations.  However, they weren’t as optimistic as their peers nationally, who are projecting the economy to strengthen to pre-recession levels.  “The U.S. economy is improving, but it appears the N.C. economy will be a step behind in the overall recovery,” said Mekael Teshome, an economist with PNC.

The survey found 20 percent of N.C. employers expect to hire full-time employees during the next six months, while 11 percent expect to add part-time employees and 6 percent plan to reduce full-time staff. “An improving outlook for sales or business expansion plans are cited by 65 percent of owners as top reasons to add employees,” according to the survey.  Teshome acknowledges the full-time hiring projections aren’t overly optimistic, but do represent an improvement over recent years.

Other economic outlooks, such as from Manpower Inc., also have shown a slight increase in employer hiring interest in recent quarters. Manpower projects 17 percent of N.C. employers will add workers in the second quarter and 5 percent will cut staff.

The PNC survey found 82 percent of N.C. business owners hope to increase their business “at least a moderate amount” over the next six months.  Teshome said he was not surprised that more than three times as many business owners (68 percent) are more interested in making a capital investment, whether in equipment or software upgrades, than adding full-time staff.

“Some employers want to see a few more months of positive data and positive news, since they are risk-adverse to full-time hiring,” Teshome said. “They want to feel confident the recovery has staying power even against unforeseen economic shocks.

“For them, it’s an easier decision to upgrade their equipment and technology to enable their existing workforce to be more efficient with their work time.” In terms of hiring expectations, 45 percent of the business owners say their requirements for employee skills and background are higher now. Their top-three priorities are computer/technical abilities, extensive experience in their field and sales skills.

About 69 percent of the business owners expect to raise prices by more than 2 percent to help offset a projected increase in health care costs. About 21 percent expect to have double-digit sales gains during the next six months.

“The obvious question is whether the next six months will be better economically,” Teshome said. “My expectation is that it will be. It appears the housing depression is about over, with home prices firming up and more in balance with wages.”  Read More.


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