Optimism about the economy has plummeted among midsize business leaders in the United States, according to our 2023 Business Leaders Outlook survey. Only 8% have a positive outlook about the global economy today; a year ago, that number stood at 34%.
Attitudes about the national economy also have changed. Roughly one-fourth (22%) are optimistic about the U.S. economy this year, down sharply from 50% in 2022. Notably, 65% of business leaders in the United States said they expect a recession in 2023.
Inflation continues to be an issue, with the overwhelming majority (91%) of leaders saying their costs are rising. In response, more than 80% of businesses have passed a portion of their higher costs onto consumers and buyers.
But the news isn’t all doom and gloom. Most leaders (66%) are still optimistic about their own company’s performance. Nearly 90% expect to add or keep employees. And supply chain challenges have eased somewhat: 39% said it has gotten easier over the past 12 months to source materials and ship goods.
About the survey
Started in 2011, the annual and midyear Business Leaders Outlook survey series provides snapshots of the challenges and opportunities facing executives of midsize companies in the United States.
This year, 791 respondents completed the online survey between Nov. 29 and Dec. 13, 2022. Of those respondents, 157 self-identified as working in commercial real estate. The 2023 survey captures those responses for the inaugural Business Leaders Outlook: Commercial Real Estate.
Results are within statistical parameters for validity; the error rate is plus or minus 7.9% at the 95% confidence interval.
Economic outlook for 2023
Global economy: Optimistic 8%; Neutral 32%; Pessimistic 60%
National economy: Optimistic 22%; Neutral 36%; Pessimistic 43%
Local economy: Optimistic 39%; Neutral 37%; Pessimistic 24%
Industry performance: Optimistic 46%; Neutral 36%; Pessimistic 18%
Company performance: Optimistic 66%; Neutral 26%; Pessimistic 8%
Optimism on the decline
The share of midsize U.S. business leaders who are optimistic about the national and global economies has fallen steadily since peaking in 2018. This year, in fact, marks the lowest levels of optimism since the Business Leaders Outlook survey began.
National and global optimism
National economy
2012: 49%
2013: 37%
2014: 54%
2015: 68%
2016: 39%
2017: 80%
2018: 89%
2019: 73%
2020: 59%
2021: 44%
2022: 50%
2023: 22%
Global economy
2012: 16%
2013: 18%
2014: 27%
2015: 18%
2016: 9%
2017: 30%
2018: 69%
2019: 39%
2020: 24%
2021: 31%
2022: 34%
2023: 8%
Bullish on their own businesses
The vast majority of businesses (86%) expect their revenues to grow or hold steady in 2023. But a smaller percentage (76%) expect their capital expenditures to increase or remain the same.
Business expectations
Revenue/sales: Increase 63%; Remain the same 23%; Decrease 14%
Profits: Increase 51%; Remain the same 26%; Decrease 24%
Capital expenditures: Increase 33%; Remain the same 43%; Decrease 24%
Capital needs: Increase 34%; Remain the same 51%; Decrease 15%
Election effects
Leaders generally don’t expect many changes due to recent elections. The one outlier? Inflation, with more than half thinking it will get worse.
Sentiment following the 2022 elections
Climate change concerns: Worse 25%; Same 64%, Better 11%
Inflation: Worse 51%; Same 40%, Better 9%
Regulatory environment: Worse 45%; Same 49%, Better 6%
Trade policy: Worse 33%; Same 60%, Better 6%
Corporate taxes: Worse 44%; Same 51%, Better 5%
Infrastructure: Worse 20%; Same 65%, Better 15%
Government favorability toward businesses: Worse 46%; Same 46%, Better 8%
Business challenges
U.S. business leaders face a litany of challenges today. Among them: persistent inflation, snarled supply chains and a shortage of workers.
Top ways companies are adapting to inflation*
Raising prices: 77%
Making changes to purchasing: 44%
Automating processes: 36%
Strategic stockpiling: 28%
Watching change in relative prices: 28%
Changing pricing model: 27%
*Among respondents who indicated they are experiencing inflation.
What’s driving up the cost of doing business*
Retaining/hiring employees: 85%
Supply chain: 71%
Raw materials: 59%
*Among respondents who indicated they are experiencing inflation.
Top responses to the labor shortage*
Increase wages and/or benefits: 67%
Offer upskilling/training: 43%
Invest in automation: 41%
Provide flexible work location: 35%
Offer flexible hours: 30%
*Among respondents who indicated they are planning to increase staff or maintain their current headcount.
Top external business threats
General market volatility: 30%
Competition: 20%
Cost of debt/access to capital: 16%
Energy prices: 9%
China and trade/policy concerns: 7%
Cybersecurity and fraud: 5%
15% are considering investing in renewable sources of energy as a result of rising energy prices*
*Among respondents who listed energy prices as their top external threat.
Cyberattacks experienced in last 6 months/b>
Not directly impacted: 63%
Business email compromise: 20%
Payments fraud: 19%
Malware (including ransomware): 9%
Security of data/integrity concerns: 5%
International plans
45% conduct business outside the U.S.
Types of international activities*
Sell to markets outside the U.S.: 80%
Buy from markets outside the U.S.: 62%
Have operations outside the U.S.: 54%
Have sales office outside the U.S.: 41%
Joint venture to sell outside the U.S.: 21%
*Among respondents who indicated they conduct business outside the U.S.
Top international business concerns
Geopolitical concerns: 58%
Global supply chain: 45%
Trade barrier/tariffs: 31%
Currency risk: 25%
Growth in developed markets: 20%
Growth in emerging markets: 13%
Social responsibility
Top areas of focus within corporate responsibility: Diversity, equity and inclusion 31%; Governance 34%; Social 55%
Top objectives motivating corporate responsibility*
Build company culture: 76%
Improve employee retention: 65%
Establish/reinforce company’s position in community: 49%
*Among respondents who indicated they plan to focus on an area of corporate responsibility in 2023.
Business transitions and growth plans
Plans for business transfer
Yes, full transfer: 14%
Yes, partial transfer: 13%
Timeline to transfer business*
Within the next two years: 65%
Two or more years from now: 35%
*Among respondents who indicated they have a full or partial business transfer plan in place.
Growth strategies for the next 12 months
Introduce new products/services: 54%
Strategic partnerships/investments: 45%
Focus on most profitable products: 41%
Expand into new domestic markets: 38%
Seek mergers and/or acquisitions: 38%
About the survey
Started in 2011, the annual and midyear Business Leaders Outlook survey series provides snapshots of the challenges and opportunities facing executives of midsize companies in the United States.
This year, 791 respondents completed the online survey between Nov. 29 and Dec. 13, 2022. Results are within statistical parameters for validity; the error rate is plus or minus 3.5% at the 95% confidence interval.
Who took the survey
CEO/chairman/chairwoman: 40%
CFO: 33%
Owner/founder: 16%
Other: 9%
Company size by number of employees
1-49: 17%
50-99: 19%
100-249: 23%
250-499: 16%
500-999: 10%
1,000-4,999: 13%
5,000+: 2%
Company size by annual revenue
Under $20mm: 17%
$20mm - $100mm: 44%
$101mm - $499mm: 29%
$500mm+: 10%
Company by industry
Government: 1%; healthcare: 6%; higher education: 1%; home services: 2%; industrials: 7%; manufacturing: 26%; media/entertainment/advertising: 3%; nonprofit: 3%; oil and gas: 2%; other professional/non-finance: 7%; real estate: 8%; restaurants/food services: 3%; technology: 7%; transportation/logistics 4%; wholesale/retail: 12%; other: 9%
Note: Some numbers may not equal 100% due to rounding.
Our experts
Contributors
John Simmons
Head of Middle Market Banking & Specialized Industries JPMorgan Chase Commercial Banking
Morgan McGrath
Head of International Banking Commercial Banking, J.P. Morgan
Ginger Chambless
Head of Research Commercial Banking, J.P. Morgan
JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/cb-disclaimer for disclosures and disclaimers related to this content.
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