JPMorgan Chase's annual Business Leaders Outlook survey revealed business leaders are more optimistic about the economy in 2024 compared to one year ago.
The survey found 40% of midsize and 51% of small business leaders anticipate a recession in 2024,
down from 65% and 61% respectively.
"There was less pessimism in terms of their national outlook on the economy than this time last year... but business leaders are still somewhat tempered in terms of their outlook on the economy," JPMorgan Commercial Banking Head of Research Ginger Chambless told Yahoo Finance Live.
The survey also found 54% of midsize business leaders cited labor-related issues among their most significant challenges, followed by uncertain economic conditions, revenue/sales growth prospects and rising interest rates.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino.
Video Transcript
SEANA SMITH: Let's talk about a new survey that has just been released, a new survey revealing that business leaders are still split on recession forecasts for the year ahead. But as inflation continues to moderate and the Fed contemplates rate cuts, more and more leaders are paring back their odds of a recession.
A new survey out from JP JPMorgan Chase revealing that 40% of mid-sized business leaders anticipate that a recession or believe that we are already in one. That's down from 65% a year ago. Joining us now is Ginger Chambless, head of research for commercial banking at JPMorgan Chase.
Ginger, it's great to have you here. So talk to us just about what you're hearing from business leaders right now. Still sounds like they're a bit cautious heading into 2024, but a bit more optimistic if we compare it to last year's levels.
GINGER CHAMBLESS: Yes, and thanks so much for having me on. So there-- we take this survey once or twice a year to take a gauge of how business leaders are feeling in terms of their business prospects and outlook for the economy. And there were a few notable changes in this year's survey relative to the one that we took a year ago.
In terms of the changes, first and foremost, there was less pessimism in terms of their national outlook on the economy than this time last year. And as you noted in the intro, along this same vein, we see fewer business leaders that are anticipating recession in 2024.
When we were heading into 2023, there was a majority of small and mid-sized business leaders expecting recession. Now as we look forward to 2024, that's about 40% for mid-sized business leaders and about 50% for small business leaders.
Now one area that remained the same relative to last year's survey was in terms of business challenges. The top challenges that business leaders are facing continues to be labor issues.
SEANA SMITH: Right.
GINGER CHAMBLESS: So that would include tight labor shortages, attracting and retaining talent, things like that. And then also inflation-- so we have seen some moderation there, but it remains a top challenge for business leaders.
MADISON MILLS: Well, I really want to circle back to that, Ginger, because when I hear that these businesses are still struggling with labor, I just kind of can't believe that we're still having this problem. But it does make sense given that we still see some good numbers in the jobs data that indicate that there is a mix of job openings across the country and hiring continuing. What does your data tell you about what types of businesses are still struggling to find employees and to retain talent?
GINGER CHAMBLESS: Sure. So our business leader survey really is across all industries, and like I said, small and mid-sized businesses. And what came out of the survey is that there is 86% of mid-sized business leaders expect to maintain or add headcount in 2024. So that's still a pretty high number, and I think, speaks to the idea that businesses are still looking to add workers even in this environment where they're still somewhat tempered in terms of their outlook on the economy.