A new PNC Economic Outlook survey released today revealed that many businesses are pessimistic, not only about the economy, but also the success of the economic stimulus package.  Only 6% of businesses surveyed were optimistic about the economy, and 19% expected their short term profits to decrease. When asked about their top concern, 36% cited a recession, and 30% selected increased energy prices. Sixty three percent of those surveyed expected to see little or no benefit to their businesses from the stimulus package.

By region people are the most pessimistic in the Midwest where only 8% expect to benefit from the stimulus package. The West was second at 11%, and the South and Northeast were least pessimistic at 19%. Only 35% expect to see some benefit from the package, and those people are in the retail and wholesale sectors. Ten percent of companies surveyed said that they will have to reduce their number of full time employees in the six months.

I think this study highlights the fact the crisis in economic confidence is not limited only to consumers. As the new jobless claims report issued today confirms the poor economy is starting to impact more than the prices at the pump and supermarket. There is a psychological element to any economic slowdown, and I am not sure if our collective psyche has hit bottom yet. In fact, I believe that we are only starting to feel the pain now. It appears that the only way our optimism will be restored is with the election of a new president, and the fresh start that comes with it. The funny thing about the economy as an issue is that much of it is based on perception. One can list all the numbers in the world as evidence of otherwise, but if people think that the economy’s bad, then that’s what it is.

PNC Survey:

http://media.prnewswire.com/en/jsp/main.jsp?resourceid=3701464

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