Nearly two-thirds of business leaders representing small- and mid-size companies are bullish about global and U.S. economic growth through this year, according to an annual Business Pulse Survey by SunTrust Banks Inc.
Business leaders were asked what actions, if any, they thought the government could take that would help their companies the most.
In all, 46 percent said health care reform would help the most; 44 percent responded with tax reform.
Middle-market leaders head businesses with annual revenue of $10 million to $150 million, while small-business leaders run companies with revenue of $2 million to $10 million.
Mid-market leaders cited reducing regulations (39 percent) and investments in infrastructure (37 percent) as other ways to spur business momentum.
Business leaders were even more optimistic about their own companies, with 75 percent saying that their outlooks are strong.
“Business owners, chief executive officers and chief financial officers in central Virginia are more optimistic not just about the economy but their own companies,” said John Stallings, president and CEO of the Virginia division for SunTrust. The Atlanta-based bank is one of the largest employers in the Richmond area.
Their optimism has improved over the past couple of years, matching the results of the survey with about 75 percent of CEOs and CFOs here feeling strong about the business outlook, Stallings said.
“Health care reform, tax reform, reduced regulations and infrastructure investment are the four categories summing up their optimism,” he said.
“In terms of their five-year outlook, one thing I have noticed is the opportunity to help clients in their succession planning. A lot of business owners bravely led their organizations through the Great Recession and now that they are into the recovery, they are ready to hand the reins to the next leaders.”
Their top business concern centers around cybersecurity and dealing with new fraud tactics, Stallings said. “Most of our clients have had some attempted breach or fraud activity. We have been able to mitigate losses with fraud protection services that we offer.”
Decision-makers representing more than 500 small- and mid-size businesses participated in the global market research survey, which was conducted in January.
“This year, business leaders are feeling very prepared to take advantage of growth opportunities; 75 percent believe they have access to the critical capital needed,” said Allison Dukes, commercial and business banking executive at SunTrust.
“Three out of four have a goal-setting process linked to long-term growth strategies and are comfortable that they will achieve their goals,” Dukes said.
In 2017, the short-term priority for 31 percent of mid-market companies is profitability, a 29 percent increase since 2016, while 34 percent of small businesses are focused on revenue, a 54 percent increase from last year.
Introducing a new product or service over the next five years is a top strategy to stimulate growth for mid-market (40 percent) and small-business leaders (31 percent). Making a major capital investment (31 percent) and acquiring another company (17 percent) are greater priorities for mid-market companies.
To undertake these initiatives, common strategies include using cash on hand, reducing costs, obtaining a bank loan, and reinvesting corporate earnings.
“Over the past four years, businesses in the small- and mid-markets have taken incremental steps toward growing their companies, including mergers and acquisitions, hiring and improving cash flow,” Dukes said. “Now, they see an opportunity for significant structural changes in taxes and regulations to unleash additional business growth.”
Survey results have a maximum margin of error of plus or minus 5 percentage points at a 90 percent confidence level.
SunTrust had total assets of $205 billion and total deposits of $160 billion as of Dec. 31. It operates 1,300 branches in the Southeast and Mid-Atlantic states, including 46 in the Richmond area.