Business owners skeptical of stimulus plan
63% of business owners expect to see little or no benefit from government rebate checks designed to boost the economy.
NEW YORK (CNNMoney.com) -- Nearly two-thirds of the nation's small- and mid-sized business owners don't anticipate much of a boost to their bottom line from the government's financial stimulus package, according to a survey released Thursday.
The PNC Economic Outlook found that 63% of business owners expect to see "little or no benefit" from the government's tax rebate checks, which are coming in May.
Indivdual taxpayers who earn less than $75,000 annually will receive $600, while married couples, who together earn less than $150,000 and file jointly, will get $1,200. The stimulus package also includes a $300-per-child tax rebate.
The survey revealed heightened levels of pessimism about the economy among business owners, according to the PNC Financial Services Group (PNC, Fortune 500). Only 6% were optimistic about the economy over the next six months, and 19% said they expect to see profits shrink.
"The inherent optimism we have found among these business owners is absent in these new findings, reinforcing our view that the U.S. economy is falling into a short and shallow recession for the first half of this year," said Stuart Hoffman, chief economist for the PNC Financial Services Group.
Sentiment about the stimulus plan's influence varied by region and industry. Business owners in the Midwest were the most skeptical - only 8% of them expect to see any benefits, according to the survey. Industrywide, wholesale and retail business owners were more optimistic about the plan than those in the manufacturing and service industries.
On the upside, 66% of business owners surveyed said they had no plans to change their employment levels over the next six months. However, a full 10% of respondents expect to cut jobs. That's the highest percentage since the survey began five years ago. A majority of business owners also expect to see higher prices from suppliers, and 43% those surveyed said they're prepared to pass those extra costs on to customers by raising prices.
Furthermore, an increasing number of business owners are worried about the availability of credit, with nearly one out of five saying it is more difficult to get credit now, compared with just three months ago. Only one in seven said it was easier to get credit. Nearly half of those surveyed said they foresee housing prices to fall over the next six to 12 months, which could have a negative impact on business. Customers who have less valuable homes feel less wealthy and are less inclined to spend money, explained PNC chief economist Stewart Hoffman.
The survey, conducted every six months since 2003, polled 957 small- and midsized- business owners - 457 of which were in New Jersey, Pennsylvania and Maryland - between late January and late February. 
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