Twice a year, M&T Bank conducts a
survey of senior managers and owners of mid-sized businesses located throughout the bank's geographic footprint. In our just completed first quarter 2018 survey, we saw the highest degree of optimism among business owners since the Great Recession of 2009.
This quarter's survey results suggest that mid-sized companies remain upbeat about the near-term outlook for their business and the economy, driven in part by tailwinds from federal tax reform legislation.
- 29% of firms plan to increase capital expenditures as a direct result of the tax cut package, and 25% plan to increase worker wage rates. At least 1-in-10 plan to hire additional workers, provide employee bonuses, or increase payouts to shareholders as a result of tax reform.
- 70% of middle market firms say the national economy has improved over the past six months, the highest reading since the recession and well above the 44% score one year ago.
- On net, 35% of respondents plan to increase hiring, up from 26% a year earlier. However, an increasingly tight labor market will likely make it challenging for firms to acquire and retain top talent.
In terms of legislative priorities, respondents were most interested in seeing Congress make another attempt at healthcare reform, while an infrastructure bill and regulatory rollbacks were also cited as important priorities.
In contrast, few firms are interested in immigration reform, changes to the welfare system or renegotiating existing trade agreements.
In the Greater Philadelphia region, area employment growth remained solid in 2017, led by strong gains in business services, private education, health care and leisure & hospitality hiring. Overall, businesses in the region appear poised to take advantage of favorable overall conditions in 2018.