Half Full or Half Empty? Denver Business Owners Split on Optimism

Steady inflation and looming recession worries mean price hikes are coming, according to PNC.

With concerns around inflation and the beginning stages of a recession, a new survey of small and mid-sized business owners conducted by PNC reveals about half are optimistic about the economy or near-term future of their business.

With such an even split, it’s hard not to think of the adage, is that glass half full or half empty?

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ColoradoBiz took a look at the findings in PNC’s recent Economic Outlook, a survey seeking to measure confidence in the Denver metro economy by capturing business owners’ attitudes and sentiments on a variety of topics including the economy, hiring, regulatory environment and technology and how business owners think they’ll ride out inflationary pressures, supply chain disruptions and political and geopolitical uncertainties related to the national and local economies.

Overall, the results showed that Denver business leaders expectations about their own companies remain strong, with half feeling highly optimistic, similar to the national survey (49%), while the share of those feeling pessimistic is just 2% compared to 7% among business leaders nationally. Nearly two in 10 (18%) Denver business leaders are highly optimistic about the national economy compared with 22% among business leaders nationally. Six in 10 (61%) are moderately optimistic while two in 10 (21%) Denver leaders are pessimistic.

The findings are broken down into distinctive categories: price hikes and coping with inflation; supply chain disruptions; staff shortages; raises/employee compensation; recessionary fears, and consumer prices. PNC rotates major cities in this bi-annual effort and surveyed Denver last in Spring of 2021.

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Key Findings from PNC:

  • Concerns about inflation and the impact of price hikes on their businesses remain top of mind among Denver executives. Price increases are in the works among nearly six in 10 (59%) Denver businesses compared to 63% nationally. Of Denver businesses expecting to raise their own prices to their customers, more than a third (34% vs. 36% nationally) expect to raise them by 5% or more in the next six months.
  • The primary rationale for price hikes is favorable market conditions (56% vs. 44% nationally) and keeping up with rising non-labor costs (32% vs. 38% nationally). Just over one in 10 (12% vs. 18% nationally) point to rising labor costs. Price pressures on their businesses, and elevated supplier costs and capital spending also are factors.
  • In addition to increasing prices for their own goods and services, over seven in 10 (72%) have indicated they are making other adjustments to address higher inflation, including increasing efficiency, cutting costs and managing cash flow.
  • Supply chain disruptions continue to be a concern for Denver business owners and have affected four in 10 of those relying on a supply chain, compared to 47% nationally.
  • Less than two in 10 (16%) relying on inventory in their supply chain are coming up short. Denver owners remain hopeful: nearly half (48%) expect supply chain timeliness to improve in the next six months.
  • Over four in 10 (44%) Denver businesses face staff shortages, compared to 41% nationally, and hiring continues to be a challenge for many.
  • A third of Denver business leaders expect to increase employee compensation, compared to 40% nationally. More than one in 10 (14%) Denver business owners or leaders expect to continue or increase signing, retention or other bonuses in the next six months compared to more than two in 10 (23%) nationally.
  • Denver business owners are expressing concerns that a recession is on the horizon. Almost two-thirds (65%) fear a recession is likely in the next 12 months compared to 69% nationally. Three in 10 (29% vs. 30% nationally) believe the likelihood of a recession in the next 12 months is very likely.
  • Aside from any pricing changes they expect to make in their own businesses, four in 10 (39%) of all Denver owners expect to see consumer prices in the economy, overall, increase by 5% or more in the next 12 months. This price change expectation compares to 36% of owners nationally who expect an increase of 5% or more.


Along with its findings, PNC senior analyst Kurt Ranking included the following commentary to summarize the findings.

Denver’s economy has performed well in recovery after the pandemic induced recession. The market’s labor force is 4% above its pre pandemic level, compared to essentially no change for the nation.  According to PNC’s Economic Outlook Survey, Denver’s small and mid-sized business owners intend to raise prices for their goods and services to a degree similar to that expected across the U.S.

The root of those price hikes is confidence in the regional economy’s capacity to absorb the increases, which is higher than the national findings (56% vs. 44%), rather than higher labor costs. Denver’s economy is positioned to ride out the remainder of the current inflationary tide and has enough labor market strength to rebound relatively well after any broader slowdown in the U.S. economy.

Denver’s households are well positioned to help the local market’s economy navigate near term economic volatility. Wage growth in Denver has nearly kept pace with inflation throughout the past 18 months, allowing consumers to better afford the higher prices that have affected all facets of their household budgets.

The upside to this is that Denver households have accumulated less debt and depleted less of their savings than in many parts of the nation where wage growth has not matched consumer price growth. If the U.S. economy slows in 2023, the relatively stronger consumer balance sheets in the region will provide more cushion to fall back on, and thus should require less consumer pullback and less of a slowing in job growth as a result.


For more information visit PNC’s Economic Reports page where their economists provide analyses and forecasts of national, regional and global economic & financial trends.

Categories: Business Insights, Consumer, Finance, Industry Trends