IB partnered with Chamberlain Research Consultants (CRC) to poll a pre-selected group of 100 companies. Chamberlain researcher Tony Trout has been a tremendous help in structuring the questionnaire, summarizing the data, putting up a Web site for participants so they can get “live” data, and giving back to IB the summary statistics and commentary. President Sharon Chamberlain has made her staff available to us to provide the business community with new tools, and we thank CRC for its ongoing contributions to this project.
The IB100 group includes cross-industry, business-to-business, and business-to-consumer entities, and a few significant nonprofits. The first [monthly] polling was done in June.
IB Asks:
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Commentary from our Participants:
This month, Chamberlain Research Consultants (CRC) included two new questions to help IB learn more about our sample population’s responses to (1) the federal stimulus package and (2) the economy.
New Question: The Federal Stimulus Package (2009 American Recovery & Reinvestment Act) has, on the whole:
8% – Helped the economy a great deal
43% – Helped the economy somewhat
22% – Made no difference on the economy
18% – Hurt the economy somewhat
9% – Hurt the economy a great deal
Why did you answer the way you did?
- Provided short-term benefits, but creates long-term problems (20%)
- Most stimulus went to the government, not private sector (14%)
- Stabilized a financial emergency (14%)
- Money not spent intelligently (13%)
- Negligible effect (10%)
- The stimulus did not address the core economic problems (10%)
- Created jobs (9%)
- Debt will create a financial burden, tax increases (8%)
- Most stimulus went to Wall Street, not Main Street (7%)
- Created confidence; psychological benefit (7%)
- May have preserved jobs, but did not create jobs (6%)
- Too soon to know the outcome (3%)
- The banks are still not lending (2%)
- Miscellaneous (2%)
- No comment (2%)
New Question: Three examples of specific actions your company has taken to respond to the current economic difficulties?
34% – Cut back on expenses
14% – Increased marketing
13% – Cut staff
13% – Negotiate: vendors & bank; barter
13% – Pay cuts
11% – More client communication
11% – Review business strategy
10% – Increase sales efforts
10% – Hiring freeze
9% – Benefit cuts
9% – Pay freeze
9% – New products
8% – Cut hours & overtime, do furloughing
7% – Increase networking, partnerships
5% – Reduce charitable donations
5% – Travel & training cuts
5% – Improve productivity, efficiency
5% – Improve customer service
5% – Miscellaneous
5% – No comment
3% – More vendor communication
3% – Maintain cash reserves
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IB Analysis
What the difference between how our IB100 executives view the economy now versus how they looked at things this past summer?
Nationally and locally and personally, there has been only marginal improvement in the outlook of our select group of Dane County executives, even though some economic metrics (third quarter growth of 3% and fewer job losses in November) have improved.
Exodus from Poor to Fair
When we first took their temperature in June, 0% rated the national economy as excellent, and that needle never moved. Meanwhile, the percentage of those who viewed the national economy as good moved form 3 to 7 %; the segment that rates the national economy as fair saw the biggest increase, 39 to 51%, and the percentage that rates it as poor dropped from 57 to 43%.
Their perception of Dane County’s economy improved along similar lines. Virtually nobody rated it as excellent in either time period, but more (26 to 30%) now rate it as good; fewer rate it as only fair (70 to 63%); but slightly more rate it as poor (3 to 7%).
A greater percentage have always been higher on their personal economic situation, as 10% now view it as excellent (compared to 8% in June); 60% view it as good (compared to 54% in June); 25% consider it fair (34% did in June); and 5% consider it poor (as opposed to 3% in June).
The Firm’s 90-Day Outlook
Then and now, their 90-day company outlooks were mixed. In June, 54% expected an increase in revenue, compared to 49% in November; 25% expected revenue to stay the same in June, whereas 34% do today; 21% forecasted a revenue decrease in June, compared to 16% more recently.
In terms of staffing, 28% now forecast an increase in 90 days, compared to 20% in June; 60% predict staffing will stay the same, as opposed to 66% in June; and 13% envision a decrease, compared to 15% in June.
Sounding perhaps the most optimistic note, 24% recently forecast an increase in business expenditures, compared to just 15% in June; 49% expect business spending to remain constant, compared to 54% in June; and 26% anticipate a drop in business expenditures, whereas 31% did in June.
As the holidays approached, IB 100 members were more inclined to pump up charitable giving. Thirteen percent expect an increase in giving (10% did in June), 64% forecast a level amount (57% did in June), and only 23% forecast a drop, compared to 33% in June.
Jobs on the Brain
This gradual improvement also is reflected in the comments of IB execs. While a majority of them don’t believe federal stimulus spending had much of an impact beyond stabilizing things, they have largely stopped using terms like “malaise” to describe economic conditions.
The official unemployment rate reached 10.2% by the end of October, the government reported last week that November job losses dropped to 11,000. Some saw that as a sign the economy is close to turning a corner, while others said the figure was a temporary blip due to seasonal hiring.
Immersed in issues like health care and climate change, President Obama has unveiled a multi-billion-dollar proposal that includes tax breaks for small businesses. Noting that a staggering 7 million people have lost their jobs since the onset of the recessions, he said the tax breaks should go to small businesses that hire in 2010. He also proposed a one-year elimination of capital gains taxes on profits from small-business investments, and the elimination of fees on loans to small firms.
Some of the money will come from unspent TARP or “bailout” funds.
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