Bank of America has released its first “2023 Mid-Sized Business Owner Report,” finding the sector well-positioned for growth in 2024 in the face of significant macroeconomic events. Report screenshot

Bank of America has released its first “2023 Mid-Sized Business Owner Report,” finding the sector well-positioned for growth in 2024 in the face of significant macroeconomic events.

In a survey conducted in May of 301 medium-sized U.S. business owners with revenue from $5 million to under $50 million, 75% believe their revenue will increase over the next 12 months. Another 71% plan to hire and 75% plan to expand their business in that period.

Locally, businesses like manufacturing, transportation/logistics and health-related sectors are growing and optimistic.

Inflation, threat of recession and higher interest rates remain their key concerns, according to the report.

 

Mark Riley, Central Valley market president for Bank America, said inflation has slowly decreased as the Federal Reserve works to stabilize the economy. But he acknowledged the impact of higher interest rates.

“If those interest rates are coming down, and the cost of borrowing that money to grow is less, then it provides an incentive for them to grow because their cost to grow is less,” riley said.

Medium-sized business owners are taking steps to attract and retain employees in the face of a labor crunch. Some 41% said they will raise wages to attract competitive talent. Of those enriching their benefits, 39% are increase paid time off, 38% are offering cost-of-living bonuses and 37% are boosting health care benefits.

According to Riley, medium-sized business owners want to maintain stronger relationships with their employees. 

“It’s supply and demand principle. The supply of good people diminishes as time passes, and you need to pay them while they’re out there a little more to retain them,” said Riley. “It’s a good time to be an employee for some of these employers that are looking for new people.”

Many medium-sized business owners need help finding employees to fill certain jobs, but they are investing in equipment and technology to fill in the gaps.

Anticipated stabilization of interest rates will help in 2024.

“At the rates you’re looking at reducing next year, you’re more optimistic that you have the ability to acquire that equipment to continue to expand your business — if one of the issues you’re dealing with is less of an employee base,” said Riley.

Bank of America is hopeful that next year medium-sized business owners will be in a better position to expand further in 2024.

“While there are always a number of unknowns, it’s sometimes downward pressure that is expected,” said Riley. “There are enough tailwinds and bright lights ahead to signal optimism by the majority.”