JPMorgan Chase’s 2023 annual Business Leaders Outlook survey was released this month, and it has raised concern for many small and mid-sized businesses. 2023 outlook experts– John Simmons, the Head of Middle Market Banking and Specialized Industries; Morgan McGrath, Head of International Banking; and Ginger Chambless, Head of Research– have concluded many expectations and challenges for the upcoming year.
Though many businesses maintain an optimistic outlook for the next 12 months, these survey responses have encouraged businesses to re-evaluate their approaches regarding valuing, obtaining company supplies, and operating methods. 86% of businesses foresee revenue growth or a maintained equilibrium throughout 2023. At the same time, 76% expect their capital expenditures to rise or remain as they are currently.
Chase has provided these insights to businesses as they plan for 2023, advising businesses to stay up to date with economic developments. While business executives are surely aware of today's top economic stories, it is important to consistently check on present trends concerning the Federal Reserve, consumer spending, inflation, and labor markets.
Small businesses have been keeping a more optimistic outlook as they are exposed to national and international markets and expressed optimism for the national and global economy at 49% and 45%, respectively– which is similar to last year’s sentiment. Midsize businesses, on the other hand, experienced an outlook downturn– with optimism for the global economy dropping from 34% to 8%.
“Inflation has been a challenging headwind impacting businesses of all sizes across all industries. While we have seen some encouraging signs that inflation has started to moderate and should cool over 2023, businesses may still want to consider adjustments to strategies, pricing, or product mixes to help weather the storm in the near term,” Ginger Chambless, head of research, JPMorgan Chase Commercial Banking, said in a statement, per Long Island Business News.
72% of small businesses and 66% of mid-sized businesses have voiced hopefulness for the upcoming year of 2023. The survey also discovered that 69% of small businesses expect improved revenue and sales in the upcoming year, and 65% anticipate greater profits in 2023. Similarly, 63% of midsize businesses anticipate amplified revenue and sales in 2023, and 51% forecast greater profits.
Data visualization courtesy of JPMorgan Chase
The online survey was active between November 14 and 22 and collected responses from small businesses with annual revenues of $100,000 to $20 million. For midsize businesses, the survey was active between November 29 and December 13 and collected responses from companies with annual revenues of $20 million to $500 million. This year, 791 respondents completed the online survey between Nov. 29 and Dec. 13, 2022, with an error rate of plus or minus 3.1% for small business findings and plus or minus 3.5% for midsize business findings– both at the 95% confidence level.
Making a conscious effort to secure the success of your business in the upcoming year is an essential factor. A major focus is on improving working capital, an important factor in a business’s financial strength. By establishing efficient inventory management and handling present debt and liabilities, businesses can maintain strong working capital– which is even more critical in a period of economic uncertainty.
Data visualization courtesy of JPMorgan Chase
JPMorgan Chase’s 2023 annual Business Leaders Outlook did indicate some of the actions taken by respondents feeling the effects of inflation thus far. It was recorded that 77% of companies raised prices, 27% changed model prices, and 27% altered pricing models.