Amid recession fears, businesses continue hiring, JPMorgan survey says

Half of small and midsize businesses nationwide plan to increase their head count despite fears of a coming recession, a JPMorgan Chase & Co. survey found.

Anecdotally, Long Island companies are following that trend as they continue to scout for quality job candidates, said Sarah Veitch, JPMorgan Chase's Long Island-based relationship executive for middle market banking & specialized industries.

"The demand is still there," she said of the region's businesses. "The buyer is still there. [Businesses] are focused on having the right talent right now."

More than 60% of executives at small and midsize U.S. companies expect a recession in 2023, JPMorgan Chase's 2023 Business Leaders Outlook survey found.

James Glassman, head economist at JPMorgan Chase, said the survey is delivering a "mixed message" as businesses boost wages and benefits to hire and retain workers.

"They're aware this could be a challenging year, yet they're plowing ahead," he said. The nationwide survey found that 42% of small businesses and 67% of midsize businesses plan to increase wages.

Immigration limits and Long Island's demographic trends, including an aging population and out-of-state migration flows, are adding to the challenge of finding employees, Glassman said.

"That's why you see help wanted signs," he said in describing Long island's "demographic downshift."

The shortage of workers also could prompt businesses to invest in automation or outsource work abroad, Glassman said. "There's increasing incentive to figure out alternatives."

The nationwide survey also found that 83% of midsize businesses and 68% of small businesses said they had passed on higher costs to their customers.

Though small and midsize business leaders voiced optimism about their own companies' future (72% and 66%), midsize businesses were markedly more glum when it came to the national economy.

Only 22% of midsize businesses said they were optimistic about the national economy, while 49% of small businesses saw a bright outlook.

Many recent economic forecasts are calling for a brief 2023 recession as the Federal Reserve raises interest rates in a bid to slow the economy and quell stubbornly high inflation. A research note published Wednesday by Moody’s Analytics chief economist Mark Zandi said that even if the country avoids a recession, it could face a "slowcession," where economic growth slows to 0.8% in the third quarter.

The JPMorgan survey was conducted online Nov. 14-22 for small businesses with annual revenues of $100,000 to $20 million and Nov. 29-Dec. 13 for midsize businesses with annual revenues of $20 million to $500 million. In all 1,799 executives participated in the survey with a 3.1% margin of error for the small business results and a 3.5% margin of error for midsize businesses. 

By Ken Schachter

kenneth.schachter@newsday.comkschach

Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.