James Briggs

james.briggs@indystar.com

Indiana's small- and midsize-business owners are losing confidence even as the state's economy improves.

A declining percentage of small-business owners expect to hire, raise wages and generate greater profits during the next six months, according to a PNC Bank economic outlook survey released Thursday. PNC surveyed 151 small-business owners from across the state.

Only 14 percent of Indiana business owners expect to hire during the next six months, down from 18 percent in PNC's fall survey, and just 19 percent plan to increase employees' pay, down from 32 percent in the fall.

Those results come days after the U.S. Bureau of Labor Statistics reported Indiana's unemployment rate remains lower than any of the state's neighbors. Indiana's unemployment rate in February ticked up to 4.7 percent, but that's down from 5.4 percent in February 2015.

"I don't know what has Indiana employers in a bad mood, or not in a good mood, but the economy is doing far better than the survey results indicate," PNC regional economist Kurt Rankin said. "When I see 14 percent of Indiana employers expect to hire — Indiana hiring is some of the strongest in the Midwest."

When employers are looking to hire, they're increasingly worried about finding skilled workers. About 38 percent of employers say they expect it to be harder to find competent employees during the next six to 12 months.

It's not just high-tech skills employers are concerned about. Business owners also expressed a lack of confidence that they'll be able to find candidates who have manufacturing experience with tools and machinery. That fear is consistent with a January IndyStar report that found Indiana lacks manufacturing workers.

"One of the consistent indicators has been (a) shortage of skilled workers," Rankin said. "It's hard to dismiss the anecdotal evidence of employers finding it difficult to find skilled workers."

In addition to dour outlooks on hiring and wages, Indiana business owners are expecting reduced sales and profits during the next six months. Only 44 percent of business owners surveyed expect sales to increase during the next six months, compared with 49 percent in the fall, and only 39 percent expect greater profits, compared with 40 percent in the fall.

Indiana business owners also are pessimistic about the upcoming presidential election. Candidates are not addressing key issues for businesses, according to 57 percent of Indiana business owners.

Nationally, employers are more optimistic about the coming months. About 24 percent of U.S. employers expect to hire within the next six months, and 34 percent say they'll raise wages, according to PNC. Forty-five percent say they expect profits to increase.

Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.

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