Business Owners Report Business Health Improving, But No Plans to Spend
Economy, health care and taxes top concerns for presidential election
DES MOINES, Iowa -- October 24, 2012
American business owners are optimistic about the health of their businesses
but lack confidence in the economy, according to new research from Principal
Financial Well Being Index^SM: Business Owners. With Election Day quickly
approaching, business owners say the state of the economy is the financial
issue that will have the biggest impact on their vote, followed by health care
reform and taxes.
Almost half of those surveyed (47 percent) say their business financials
improved compared to a year ago and more than half (58 percent) believe their
financials will improve in the next 12 months. But when it comes to the
broader picture, nearly half of those surveyed (46 percent) are cautious about
the economic outlook for 2013, and two-thirds are holding off on making
long-term financial commitments because of the current state of the economy.
“While owners of small to medium-sized businesses report growing confidence in
what they can control – their own companies – they do so with a healthy dose
of caution in the context of the overall economy,” said Amy Friedrich, vice
president of the Principal Financial Group^®. “As these owners prepare for
Election Day, the economy will not only influence their vote, but also their
long-term plans for spending.”
Business owners are also reluctant to spend cash. Sixty-three percent said
they have surplus capital, but almost three-quarters (73 percent) of those who
have surplus capital are not spending any of it. Still many business owners
plan to grow their businesses in the near term. Forty-two percent plan to add
staff in the next year and almost one-third (31 percent) plan to expand
business operations in the U.S.
The Principal Financial Well-Being Index: Business Owners, which surveys
American business owners of small to medium-sized businesses with 10 to 500
workers, is part of a series on the financial well-being of Americans released
quarterly by the Principal Financial Group. The survey is conducted online by
Harris Interactive^®.This is The Principal’s first survey on the financial
well-being of the American business owner.
State of the economy, health care driving decision-making
The same financial issues swaying business owners’ votes are also influencing
how they run their businesses. Health care and the economy are top-of-mind,
with more than half saying health care costs (57 percent) and economic growth
(54 percent) are impacting their business decisions. Other top issues include
uncertainty of taxes (45 percent), gas prices (43 percent), unemployment (37
percent) and inflation (36 percent).
It comes as no surprise that health care is a priority for business owners in
both the political world and the business world. One-fourth (24 percent) rate
their top concern for the well-being of their business as managing the cost
and administrative responsibilities of health care and another 24 percent say
understanding how health care reform impacts their business is their top
Health care costs spur interest in wellness
While business owners may not be able to control or predict the future of
health care, many are turning to wellness programs to improve employee health
and reduce risks. Nearly two-thirds of those surveyed (64 percent) offer some
form of wellness benefit to their employees.
“With lingering ambiguity around health care reform, the challenge of managing
health care costs can be overwhelming for owners of small and mid-sized
businesses,” Friedrich said. “Business owners are seizing opportunities to
take action amidst this uncertainty and experiencing positive results.”
Among businesses that offer wellness benefits, almost one-third (32 percent)
have experienced lower health insurance costs. Business owners report wellness
programs have contributed in other ways:
*Employees are more productive at work (47 percent),
*Increased employee retention (42 percent),
*Less time away from work (37 percent)
*Better employee engagement (36 percent).
View the full survey results at www.principal.com/wellbeing
Download the full infographic.
This Principal Financial Well-Being Index^SM survey was conducted online
within the United States by Harris Interactive on behalf of the Principal
Financial Group® between August 7 and August 27, 2012 among 604 business
owners in companies of 10-500 employees. The data have been weighted to
reflect the composition of the small to mid-sized U.S. businesses. This is one
in a series of annual studies to identify and track changes in the perceptions
of business owners of small and mid-sized businesses. The first Principal
Financial Well-Being Index^SM survey was conducted in the United States in
For more news and insights from The Principal, connect with us on Twitter at
About the Principal Financial Group
The Principal Financial Group^® (The Principal ^®)^1 is a global investment
management leader including retirement services, insurance solutions and asset
management. The Principal offers businesses, individuals and institutional
clients a wide range of financial products and services, including retirement,
asset management and insurance through its diverse family of financial
services companies. Founded in 1879 and a member of the FORTUNE 500^®, the
Principal Financial Group has $367.1 billion in assets under management^2 and
serves some 18.2 million customers worldwide from offices in Asia, Australia,
Europe, Latin America and the United States. Principal Financial Group, Inc.
is traded on the New York Stock Exchange under the ticker symbol PFG. For more
information, visit www.principal.com.
^1 “The Principal Financial Group” and “The Principal” are registered service
marks of Principal Financial Services, Inc., a member of the Principal
^2 As of June 30, 2012.
Principal Financial Group
Sonja Sorrel, 515-362-2431
Terri Hale, 515-283-8858
Press spacebar to pause and continue. Press esc to stop.