2023 Business Leaders Outlook: U.S. | JPMorgan Chase - EU-Vietnam Business Network (EVBN)

Business Leaders Outlook

Our survey shows a sharp fall in optimism about the economy as recession fears loom—but there is some hope on the horizon.

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.

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Top takeaways

Recession concerns

Nearly two-thirds of U.S. business leaders believe a recession is likely in 2023.

Views on economy

Leaders are far less optimistic about the global economy than they were 12 months ago.

Workforce outlook

Despite their negative views of the economy, most leaders expect to add or keep staff.

Capital expenditures

Companies are closely divided between increasing (33%) and decreasing (24%) spending next year.

Supply chain

More than one-third say supply chain issues have gotten better in the past 12 months.

Profit snapshot

While most leaders believe profits will rise, it’s a sharp decline from last year’s expectations.

Our experts

John Simmons Head of Middle Market Banking & Specialized Industries JPMorgan Chase Commercial Banking

John Simmons
Head of Middle Market Banking & Specialized Industries
JPMorgan Chase Commercial Banking

Morgan McGrath Head of International Banking Commercial Banking, J.P. Morgan

Morgan McGrath
Head of International Banking
Commercial Banking, J.P. Morgan

Ginger Chambless, Head of Research, Commercial Banking, J.P. Morgan

Ginger Chambless
Head of Research
Commercial Banking, J.P. Morgan

Economic outlook and expectations

Less than 40% of U.S. business leaders are optimistic about the global, national and local economies. But their pessimism doesn’t carry over to how they feel about their own companies.

Economic outlook for 2023

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 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

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

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

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

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

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

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

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

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

Who took the survey

CEO/chairman/chairwoman: 40%

CFO: 33%

Owner/founder: 16%

Other: 9%

Company size by number of employees

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

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.