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Some businesses optimistic about economy

Owners of small and midsize businesses in North Carolina are slightly more optimistic about the economy but still hesitant to hire, according to results from a new economic outlook survey released Thursday.

The survey, commissioned by PNC Financial Services Group, shows that nearly 30 percent are optimistic about their prospects in the next six months. However, only 15 percent expect to hire full-time employees – down from 20 percent last year – and 13 percent actually plan to reduce their full-time staff. “I think what we’re seeing is business think that profits … and sales are going to improve, but they’ve been through the ringer over the past five or six years,” said PNC economist Gus Faucher. “They see demand increasing but they’re not convinced it’s enough to justify new employees.”

Faucher describes the overarching business sentiment as “less pessimistic.”

North Carolina’s results, based on 152 interviews across the state, are aligned with nationwide numbers as well, he said.

The PNC survey is the latest in a line of mixed news about the economic outlook for small businesses.

The National Federation of Independent Business recently issued a statement from chief economist William Dunkelberg that said job creation is “drifting” in a positive direction. But though businesses report they’re creating new jobs, hiring isn’t following suit, according to a March survey of more than 750 NFIB members.

Forty-seven percent of the owners said they hired or tried to hire in the past three months. However, nearly three-fourths of those owners said there were few or no qualified applicants for their open positions.

“Prospects for stronger gains over the next few months are not promising,” Dunkelberg said in the statement.

But small business lending in North Carolina is up, the U.S. Treasury Department reported Wednesday.

As of Dec. 31, small businesses in the state received a boost of $290.8 million in loans, thanks to the Small Business Lending Fund, a federal program created by the Small Business Jobs Act of 2010.

The fund provides capital to community banks and community development loan funds with less than $10 billion in assets. But even with the increased available capital, many small business owners are hesitant to rely on more bank lending.

The PNC survey showed that only 15 percent of small businesses in the state anticipate they will take out a new loan or line of credit in the next six months. “Small businesses need a shot in the arm,” Dunkelberg said. “But … the slow crawl to eventual prosperity might be the best we can hope for.”

McMillan: 704-358-6045 Twitter: @cbmcmillan
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