On Wednesday morning, the fourth annual First Business Economic Survey of Dane County was unveiled at the Fluno Center on the UW campus. Sponsored by the First Business Bank and the UW-Madison School of Business, the survey queries the perspectives of CEOs, CFOs and business owners in the county about the performance of their companies over 2006, along with their expectations about 2007. The findings? In brief, some 84% of Dane County businesses are projecting increased profits, nearly a 15% increase over 2005. The primary reason given for the optimism is decreasing concern over the effect major hurricanes have on the overall economy. In short, there was no Katrina this year.
The full report is available at right in the related downloads.
The survey's commissioners point to a few key findings. The number of companies seeing sales revenue increases is down about 2.6% over last year, while 3.2% more companies saw increases in profitability. The number of employers with wage increases and more employees were up 1.5% and 2.5%, respectively, while the number of companies with increases in capital expenditures and operating costs were each down about 2.7%. They also point to findings that fewer businesses operating largely within Dane County are seeing sales increases as opposed to those operating over a large field. In other words, local small businesses are selling less than those operating nationally.
How extensive, though, was the survey, and who conducted it? As described in a press release announcing its findings:
The 2006 First Business Economic Survey of Dane County was conducted by MBA students in the A.C. Nielsen Center for Marketing Research at the UW-Madison School of Business. The survey took the pulse of 485 businesses between September and October of 2006. The survey was sent to CEOs, CFOs and presidents and/or owners of Dane County businesses with five or more employees.
There are more details in the very brief methodology at the end of the report:
The 2006 First Business Economic Survey of Dane County was sent to 4,414 local businesses. Of those, there were a total of 485 surveys received which were adequately completed pertaining to the key economic indicators. This equates to a response rate of approximately 11%. Of the 485 surveys, 79 were entered online and the remaining 406 were received via fax/mail. This sample size has an error range of 0.05, and significant differences noted in this report are at the 95% confidence level.
In other words, there was some self-selection going on, though whether it favored business owners wishing to gripe, boast, or perhaps both is unclear.
Also interesting are the demographics of the respondents. Almost 54% conduct their business primarily within the confines of the county, nearly the same percentage have 5 to 19 employees, and just under half provide services (as opposed to retail, manufacturing, tech, or the encompassing "other.")
As for 2007, some five-sixths of the respondents are expecting better performance over this year. The reasons given for this are the broad and basic (new products, new locations, a return on capital expenditures), fairly non-specific kinds of things. Some reasons given by business with less hopeful outlooks are similarly broad (a "slowing economy" and "increased competition"), but others are more specific, with some pointing towards road construction and a slower housing market as their worries. Overall, though, one particularly interesting element of this economic survey is the fact that the hot-button, highly-politicized lightning rods on the local economy (city regulations, attitudes about the state's economic climate and so on) are not part of the picture, neither asked nor offered in this look at business basics.