Most Florida businesses plan to hunker down throughout the year — cutting their capital spending, not taking out new loans and, for the vast majority, not hiring.
So concludes an annual economic outlook being released this morning by PNC and recently acquired National City.
Seventy-one percent of small and mid-sized Florida business owners plan to cut their capital spending, and just 33 percent plan to take out a new loan or line of credit over the next six months, according to the survey.
Meanwhile, only 9 percent said they plan to hire workers in the next six months, with 69 percent keeping their work force flat and 20 percent cutting jobs. Florida's unemployment rate stood at 9.4 percent in February and is expected to rise in coming months.
Companies "are refocusing on their core business and maybe holding back a little on additional capital investment," said Angel Rodriguez, National City senior vice president and business banking market sales manager for Florida.
Although small businesses have complained about a credit crunch, Rodriguez maintained his bank is still lending and building relationships. Securing a loan has "certainly become more of a challenge," he said, but some businesses are making "a conscious decision" to avoid expanding or taking on more debt until the economy improves.
The survey, which included Florida-specific data for the first time, reflects a gloomy view. About seven out of 10 businesses both nationally and statewide said they were pessimistic about the U.S. economy's prospects during the next six months.
One of the biggest drags, not surprisingly, is the ongoing housing slump. Housing prices will remain the same or fall over the next six to 12 months in the opinion of 90 percent of business owners surveyed in the state. On the upside, just over half said falling energy prices have had a positive impact on their business.
The telephone survey, conducted from Jan. 26 to March 4, has a sampling error of plus or minus 4 percentage points.