PITTSBURGH, March 31, 2011 /PRNewswire/ — One out of two U.S. small business owners expect increased sales in the next six months, but rising non-labor costs threaten to squeeze profits and result in higher selling prices over the same period, according to the PNC Economic Outlook survey's newest findings.
The spring findings of PNC's biannual survey, which began in 2003, show owners' expectations for sales and profits have rebounded from unexpected setbacks last fall along with a brighter outlook for hiring full-time employees. However, 64 percent foresee higher non-labor costs, which will prompt owners to raise prices in an effort to preserve profit margins.
Nearly two in five owners (37 percent) plan to raise their selling prices, while only 7 percent intend to cut prices, indicating a significant rise in pricing pressures compared to recent surveys. Two-thirds plan to increase prices by more than 2 percent, which is the upper bound of the Federal Reserve's preferred inflation "target range."
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