Small and midsize U.S. business leaders remain confident in their companies and resourceful in their approaches to confronting macroeconomic challenges that have created growing pains over the last year, according to JPMorgan Chase’s 2022 Business Leaders Outlook Survey, which was released this week.
The survey shows that most business leaders are feeling upbeat, with 83 percent of midsize and 71 percent of small businesses optimistic about their own performance in 2022, up from 77 percent and 63 percent one year ago, respectively.
Business leaders also have increased optimism around their industry performance and local, national and global economic outlooks compared to the start of 2021.
Despite continued uncertainty posed by COVID-19, businesses are setting their expectations high, with 81 percent of midsize businesses and 63 percent of small businesses anticipating revenue and sales growth in the year ahead.
In line with these expansion plans, more than four in 10 of those surveyed expect credit needs to increase in 2022, representing the highest percentages recorded in the last five years.
“Businesses have been key accelerators of the continued economic recovery through their resolve and ingenuity in finding new ways to deliver products and services to their customers,” said Jim Glassman, head economist, JPMorgan Chase Commercial Banking. “They now have a stronger sense of how to remain competitive in the current economic landscape, which should allow them to build on last year’s momentum.”
More than half of midsize businesses are operating at least at the same capacity as they were before the COVID-19 pandemic, with nearly one-third now running at a greater capacity than their pre-pandemic levels, indicating that some businesses have leaned into the disruption and continued to grow.
Seventy percent have also seen profits return to or exceed pre-pandemic levels.
The return to pre-pandemic productivity is on track to continue as nine out of 10 midsize businesses expect to grow in 2022, with the most common growth drivers including expansion into new markets or geographies, innovation or diversification in product and services and increased consumer demand.
Small and midsize businesses have made changes to their business models to address top challenges. They include supply chain workarounds, employee incentives, and new consumer channels, the survey showed.
In addition, small business leaders are increasingly seeking new ways of financing and funding. Some 69 percent report planning or needing financing in 2022, up from 59 percent a year ago, with software systems and development being the greatest need.
To help fund their purchases, nearly half of small businesses plan to use business credit cards, with line of credit funding being the next most common funding method.
A growing number of small businesses — 68 percent — also plan to explore online lending options, up from 56 percent a year ago, the survey showed.
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