Central Florida's small to mid-sized businesses are feeling good about the economy and the way their own operations are faring, a new survey shows.
Nearly two in three area business owners expect to make a net profit this year, with the average being about seven percent of sales. Nearly one-quarter expect to make more than 10 percent over operating expenses, the study by PNC shows.
Of business owners who expect to have excess cash at the end of the year, 42 percent will put it back into their business, over one-third will add it to cash reserves, a quarter will pay off business debts and a similar amount will give distributions to owners.
Businesses "are feeling confident," said Josh Folds, PNC business banking market manager for Florida, who focuses on businesses with $1 million to $10 million in annual revenue. "They still see opportunity ahead."
The Orlando area is second only to the Dade/Broward region when it comes to demand for loans, said Folds, who declined to give specific figures.
He did say half the loans made over the past year are for lines of credit, as businesses "have reservations after going through the recession."
Business owners also say it is hard to find good help. Nearly one third say it has become harder to hire qualified employees than six months ago. Five percent who are not hiring say they cannot find the right skilled workers.
Folds attributed the dynamic to people finding good jobs, being paid well and wanting to stay, which tightens the job pool.
One-third of Central Florida business owners expect to increase employees' pay. The figure is well above the 23 percent in the spring, when PNC last did its survey. In terms of the amount, half plan to give raises of three percent or more during the next six months.
Three in four business owners owners say they will not pursue new loans or lines of credit in the next six months, while 20 percent will.
As far as credit availability compared with a year ago, 15 percent say it is easier and 20 percent say it is harder to procure. One in three say they have spent from a loan or line of credit in the past two years, with the top use being to buy equipment or supplies.
A bit under a third plan to charge higher prices, on a par with a year ago. Half expect suppliers to charge higher prices, the same as in spring.
Three quarters expect consumer prices to rise in the coming year, compared to 86 percent a year ago, partly reflecting the sharp drop in energy prices.
PNC conducted the survey, which it does twice a year, by using an outside firm to ask small and medium sized business owners about their operations and outlooks.