Law firm conducts 2022 Business Outlook Survey, sees some optimism

Heading into the third year of a global pandemic, it comes as no surprise that the business community has tempered its optimism for the year ahead.

Just 58% of the respondents to McDonald Hopkins’ 2022 Business Outlook Survey expect business conditions in the U.S. to improve – a 12% drop from the previous year’s survey. While COVID itself remains a concern, challenges relating to the economic fallout of the pandemic are now front and center for those who responded to McDonald Hopkins’ 12th annual survey.

Rising inflation, increasing healthcare costs, government regulations, and growing data privacy and cybersecurity threats topped the list of challenges facing organizations in 2022. When it comes to two other major areas of concern – labor and employment and supply chain – 33% reported their organization has been affected by challenges related to hiring, with the most common responses having to do with difficulty finding (and retaining) the right talent, and the increased cost of labor subsequently inflating the cost of doing business overall.

As one respondent noted, “The marketplace for labor is tightening. A remote workforce is creating a global market for resources and that is coupled with trying to retain talent when merit increases are held up.”

Just 8% responded with challenges strictly related to supply chain. Notably, 22% responded their organization has not faced labor and employment or supply chain issues, with many noting this is likely due to their industry.

In last year’s survey, 64% of respondents indicated they felt Congress should provide additional economic stimulus – and yet this year, 53% responded they believe Congress and the Federal Reserve provided too much. If additional economic stimulus/management is provided in 2022, 40% believe it should take the form of management of interest rates.

Despite waning optimism about business conditions in the U.S., hope remains intact internally, with 74% of those who responded expecting conditions at their own organizations to improve in 2022, 62% expecting to increase their number of employees, and 51% expecting to invest in capital assets.

“Overall, our outlook for 2022 is very favorable as the economy recovers and pent up demand is met,” one respondent noted, while yet another stated, “Our business shows a steady/moderate increase. We are investing in equipment and resources to keep us on par with client demands as they increase moving forward.”

The 2022 Business Outlook Survey was conducted from January 10, 2022 through February 2, 2022.