Northeastern business leaders show rising optimism in economic outlook

Business leaders in the Northeastern United States are exhibiting a notable surge in optimism regarding both their individual company outlooks and the broader economic landscape, according to a recent survey conducted by KeyBank. This survey gathered responses from over 700 owners and executives of middle market businesses across the U.S., specifically targeting those with annual revenues between $10 million and $1 billion.

The findings revealed that 80% of the 150 respondents from the Northeastern region rated their outlook as “excellent” or “very good.” This figure reflects a 13 percentage point increase in confidence compared to the same period in 2022 and marks an 11 percentage point rise since the last quarter of 2023. Such a level of confidence places Northeastern middle market business leaders only marginally below their counterparts in the Southern U.S., with just a two percentage point difference.

Turning to perceptions of the overall U.S. economy, 57% of Northeastern middle market executives expressed a similarly positive outlook for the forthcoming year, the highest across all regions. This marks a significant 14 percentage point increase from the previous year, positioning the Northeast well ahead of the Midwest, where only 40% indicated an optimistic economic forecast.

The survey also delved into the specific elements underpinning this positive outlook. Among Northeastern business owners, 63% attributed their optimism to enhanced operational efficiency, while 60% credited advancements in technology. The current landscape reveals a commitment among middle market leaders to not merely endure economic challenges but to explore new opportunities that would enable them to grow and adapt.

Investment plans focus heavily on technology integration, with a particular emphasis on artificial intelligence (AI). According to the survey, 54% of business leaders intend to implement AI solutions before the conclusion of 2024, marking a 10% ascent since the last quarter of 2023. This shift towards automation and AI is part of broader strategies aimed at improving operational efficiencies, bolstering cybersecurity, and reducing overall business costs, which are increasingly seen as vital for fostering growth.

Despite the prevailing optimism, there are underlying concerns among business leaders regarding the impact of inflation, operational costs, and financial emergencies. Notably, 38% of respondents acknowledged that rising inflation has negatively affected their business operations. For those with a less favourable outlook, passing costs onto customers remains a primary tactic for managing inflationary pressures, while those who are more confident tend to focus on streamlining processes and leveraging technology to counteract these challenges.

As middle market business leaders in the Northeastern region anticipate revenue increases over the next year, a significant proportion is prioritising AI and technology investments as key components of their strategic growth plans. Amid economic uncertainty, the upward trend in optimism suggests a strong inclination towards investment in technological advancements that support operational efficiency and security—and ultimately enhance the competitive edge for these businesses.

KeyBank’s leadership underscores the critical role of tailored banking solutions in empowering these executives to navigate the complexities of business growth and investing. Jonathan Ogden, Senior Vice President and Commercial Relationship Manager, along with Brandon Nowac, Executive Vice President for KeyBank’s East Region, affirm their commitment to providing valuable insights and support to the Northeast middle market, highlighting the unique challenges faced by business leaders in the region.

Source: Noah Wire Services