While acknowledging that the nation’s supply pipeline remains problematic, an increasing number of middle market businesses are reporting strong numbers for the final quarter of this year, along with optimism for early 2022 prospects, according to a U.S. Chamber of Commerce survey.
Using a business index which reached a reading of 126.2 in the halcyon pre-pandemic days of late 2019, the survey now shows a rather buoyant reading of 129.7 for the final months of 2021.
Any reading above 100 indicates that business is expanding, while any number below 100 represents a decline.
Done in conjunction with the Chicago-based consulting firm RSM US, the Chamber of Commerce survey reveals that 42% of medium-sized businesses experienced a 43% increase in earnings in the last three months, with a significantly higher 62% saying they expect things to take a decided upturn between now and next spring.
All of this is shaking out in the midst of unprecedented supply challenges for businesses across the country. “It’s likely that middle market business conditions will remain solid even as firms work to confront challenges in securing materials and workers,” said Jon Brussels, chief economist with RSM US.
In a statement, Brussels added: “Prices paid and prices received are very strong, and we expect this to continue until supply chain difficulties are resolved.”
Middle market businesses are also grappling with any number of employment issues, with 65% of respondents indicating that their workers today are working both in the office and at home. Responding to a separate question, 54% of those surveyed said they have increased compensation in order to secure new workers.
A much larger 68% suggested that they will increase salaries moving forward, also to attract new workers.
The business index for the last six years shows a gradually increasing rate of optimism from around 124 in early 2015 to just under 135 in early 2020 before the covid-19 outbreak, which then prompted the index to dramatically decline to just over 90.
The index has generally been on the upside since the fall of 2020.
By Garry Boulard