As demonstrated in the PYMNTS Store Front Business Index, Store Front businesses are the heartbeat of the local economy.
The Index assembles data on each and every one of these businesses across the U.S. and measures their vitality every single quarter; think of it as your window into the health of this vital sector each and every 90 days.
So how is that view looking?
Well, according to a new study from JPMorgan Chase Business Leaders, it’s a little uncertain. As detailed in the 2016 JPMorgan Chase Business Leaders Outlook report, the outlook is positive on a local economy level, but nationally/globally is a little more shaky.
The study, which takes into account the perspective of executives from middle market businesses and small businesses, shows that they have positive outlooks for the next 12 months (70 percent and 69 percent, respectively). But when looking at that from a more national perspective? That middle market exec crowd dips to 10 percent being optimistic, and 27 percent of small businesses execs feeling the same.
“While business leaders admittedly see challenges overseas, they continue to see opportunities at home and anticipate positive growth in international markets over the next few years,” said Jim Glassman, Senior Economist at JPMorgan Chase.
“The challenges facing middle market businesses, especially those related to hiring talent and managing costs are indications of growing pains,” said John Simmons, Head of Middle Market Banking and Specialized Industries, Commercial Banking, Chase. “It is a positive sign that even with concerns about the global economy, their growth expectations remain strong.”
Here’s how the numbers broke down:
Expectations
Challenges
The top challenges facing businesses, according to the study in 2016 are:
International Growth
Expectations
Financing
Challenges
The top challenges facing small businesses for 2016 are:
“The challenges they are facing are certainly significant, yet not out of the ordinary for small businesses,” said Jennifer Piepszak, CEO of Business Banking at Chase. “Their general eagerness to seek financing is a strong sign that they are readying for near- and long-term growth.”
How PYMNTS’ Research Stacks Up
PYMNTS’ Store Front Business Index continues to show positive, healthy results. While demonstrating some volatility coming out of the recession, since the second half of 2012 it has shown steady growth through the second quarter of 2015.
From a benchmark of 100 in the first quarter of 2007, the SFBI has increased to 112.9 in Q2 2015. The SFBI was (not surprisingly) at its lowest in Q1 2010. From those depths it has increased by 14.5 percent through Q2 2015. Year over year, in the 2nd quarter of 2015, the Index value increased by 3.1 percent, as compared to the second quarter of 2014.
Specific improvement was driven regionally by 4.1 percent and 4.0 percent gains in the Southwest and Mountain areas, respectively, and categorically by 4.9 percent gains for Professional Services. Growth continues to be strong, and our growth forecast shows a slight reduction to 3.0 percent for the fourth quarter of 2015. This projection is led by regional increases in the Pacific West and categorically continues to be led by Professional Services. Nevertheless, if our forecast hits the mark, the SFBI will stand at 114.5 as of the end of 2015.
For more details about this month’s Store Front Business Index, click here to download the entire Index.