Donald Trump seems to have given a shot of confidence to small and mid-sized businesses across America.
Every year since 2010 JPMorgan Chase, the biggest US bank by assets, has taken the pulse of thousands of its corporate customers around the country. This year the findings of the survey, conducted over the past few weeks, were dramatic: 80 per cent of middle-market executives said they felt “optimistic” about the US economy. That was the highest reading yet, up from a relatively miserable 39 per cent this time last year.
To Jim Glassman of JPMorgan, that surge is a tribute to the achievements of Barack Obama, who left the American economy in reasonably good shape, and also to the effects of the stabilisation in energy prices, which were seesawing all over the place this time last year.
But there’s been a tangible boost, too, from the new guy in the White House.
“The changing of the guard in DC has brought so much focus on economic issues,” says Mr Glassman, managing director and head economist for commercial banking at JPMorgan. “There’s a belief that the new administration’s focus on regulation, tax reform and infrastructure investment will bring good things.”
76 per cent of middle-market respondents – defined as running companies with annual revenues between $20m and $500m – said they expected a positive impact from the election. Just 12 per cent said the impact would be negative. The top reason was trade: fears that Mr Trump’s tough talk on regional agreements might translate into damaging tit-for-tat actions.
But for the most part, though, executives think Mr Trump’s bark will be worse than his bite.
“People are looking at it, saying ‘we hear the rhetoric, but we think it is likely that a business-oriented team will come to DC to do things to totally disrupt that process,’” says Mr Glassman. “In general, you’ve got to keep an open mind about this. Rhetoric doesn’t necessarily tell you what is coming in terms of offshoring and globalisation.”
Among the other worries that the survey turned up were essentially positive things: concerns about finding the right people with the right skills, and having to pay more to keep them.
“All that is music to the ears of economists,” says Mr Glassman.
Fifty-seven per cent of middle-market respondents said they planned to hire more people in the year ahead, up 8 percentage points from last year. 71 per cent – up 10 percentage points – said they would push up pay.
The online survey was conducted from January 3 to January 20. More than 1,400 middle-market executives in the US and a total of 950 small businesses (between $100,000 and $20m) took part.