The Business Owners Confidence survey for the first half of 2014 indicates that Chicago-area mid-sized business owners are taking Obamacare in stride and expect limited effects of national and state efforts to raise the minimum wage.
The survey, jointly conducted by MB Financial Bank and Cole Taylor Bank, reported that more than 50 percent of the local business leaders have taken no action as a result of the implementation of the Affordable Healthcare Act.
Financial services and professional firms were the least likely to take action while construction and manufacturing companies more likely to make changes due to the Act’s implementation. Of those which have taken action, 31 percent are making employees pay a greater share, with that number rising to nearly 50 percent for companies in the construction business.
The survey indicated that 27 percent are reducing coverage or changing carriers.
Companies with sales of $5 million or less were more likely to take no action (61 percent) than were the larger companies surveyed.
Similarly, 67 percent of the respondents foresee no significant impact if the minimum wage were to increase from the current $8.25 to a proposed $10.00. As would be expected, financial services, professional and other services firms expect the smallest impact while construction and manufacturing expect more of an effect.
The survey also indicated that some businesses plan to pass those increased costs to consumers (20 percent) or reduce staff or hours (15 percent).
The middle-market decision makers responding to the survey expressed growing optimism over the current state of the U.S. economy for the fourth consecutive time, with 34 percent of respondents giving the national economy a good rating.
Local economic conditions were rated good by 24 percent of the respondents while only 4 percent rated Illinois’ economic policies as good.
Businesses planning to expand in the next twelve months totaled 49 percent of the respondents. Of those planning to expand, nearly 60 percent expressed interest in expanding outside Illinois.
The survey asked local importers and exporters about the challenges they face when doing business internationally.
Exporters noted that shipping and packaging logistics (28 percent) and finding an overseas partner (25 percent) were among their biggest issues. Importers noted supplier reliability (25 percent) and concerns over product quality (25 percent).
Other highlights included:
- 54 percent of the businesses said they would take no action if corporate income taxes were to go down; 19 percent would expand hiring, while 17 percent would purchase capital equipment.
- Hiring continues to be steady while expectations are that the cost of goods will remain high.
- Illinois’ corporate tax rate and pension funding are cited as the state’s most serious issues by more than half the survey’s respondents.
- Companies continue to be concerned about the economy and demand (30 percent), regulation (20 percent) and competition (19 percent).
The Business Owners Confidence survey was developed in the spring of 2012 by Cole Taylor Bank. Regulatory approvals have been received for Cole Taylor Bank to merge into MB Financial Bank. The transaction is expected to close on or about August 18, 2014.
The Business Owners Confidence is designed to gather feedback from Chicago area business leaders regarding their attitudes and perceptions of the economy, both nationally and in the local market. The semi-annual survey was conducted online by Star Data Systems Inc. from May 29 to June 12, 2014, and included 302 senior executives from mid-sized businesses across a wide variety of industries in the Chicago area. Findings are significant to a 95 percent confidence level with a margin of error of +/- 5 percent.