Market Digest

The Greater Washington Board of Trade’s Business Outlook Survey Predicts New Hiring, Investments for New Year

A new survey conducted for the Greater Washington Board of Trade shows that 59 percent of regional business executives expect the Greater Washington’s business and economic conditions will improve over the next six months while six percent expect it to get worse and 35 percent expect it to stay the same.

“By a nearly 10-to-one margin, the region’s business executives think business and economic conditions will improve over the next year rather than get worse,” said Jim Dinegar, president and CEO of the Greater Washington Board of Trade. “That is a significant expression of optimism for the region’s economy.”

The Business Outlook Index for the region has progressively risen since the first survey was conducted in February 2009, increasing from 40 to 65.

The survey was conducted for the Board of Trade by Clarus Research Group, a nonpartisan Washington-based research firm, and was sponsored by Tatum, LLC, a leading professional services company supporting the office of the CFO. The sample included 200 business executives across the Greater Washington region. Interviewing for the survey was conducted by live telephone interviewers from December 5-9, 2009.

The Business Outlook 2010 survey shows:
JOBS: By 32 percent to 12 percent, a 20 percent margin, regional business executives expect the number of jobs in their businesses to increase over the next six months rather than decrease. Thirty-five percent said their jobs number would remain the same.  “These findings show greater possibility for new employment in the region during the first two quarters of 2010,” said Dinegar. “This is hopeful news.”

BUSINESS STRENGTH: By 60 percent to 9 percent, survey respondents expect their businesses to “strengthen” rather than “soften” in 2010.

REVENUES AND SALES: By 55 percent to 12 percent, a 43 percent margin, business executives surveyed expect their total revenues or sales to increase in 2010 while 12 percent expect them to decrease.

CURRENT CONDITIONS: Forty-seven percent of business executives and owners surveyed said current business and economic conditions in the region are “mostly good” while 40 percent said “mostly bad.” Twenty-five percent said their company’s overall financial situation has improved over the past year while 40 percent say it has declined and 34 percent said it has stayed the same. “For the first time this year, the Business Outlook survey finds more business executives saying they think current business and economic conditions are ‘mostly good’ as opposed to ‘mostly bad,’” said Ron Faucheux, president of Clarus Research Group.

BUSINESS FINANCING: The survey found that over the last six months, 59 percent of business executives said acquiring financing and credit for their companies has gotten harder while only 14 percent said it has gotten easier. Looking ahead over the next few months, respondents are split on whether obtaining financing and credit will change – 37 percent expect it will get easier and 38 percent expect it will get harder. “The inability of many area businesses to get financing is a major constraint on economic and employment growth in the region,” said Peter A.S. Pfeiffer, managing partner of Tatum’s Mid-Atlantic practice. “This survey shows that bank loans and credit remain a serious pain point for many companies.”

NEW BUSINESS INVESTMENTS: According to the Business Outlook survey, plans to increase advertising and promotion have risen from 30 percent to 46 percent since February – a sizable 16 percent jump. Plans for purchasing new equipment have increased by 9 percent, upgrading new technology by 11 percent, increasing spending on professional services and consultants by 3 percent, and expanding office space or facility size by 2 percent.

FEDERAL STIMULUS PACKAGE: In the December 2009 Business Outlook survey, 64 percent of business executives said that the federal economic stimulus package has had a positive impact on the region’s economy, while 29 percent said it has had either no impact or a negative impact. The assessment of positive impact has declined from the June 2009 survey, when 76 percent of business executives said the stimulus had a positive impact. Almost as many survey respondents now say the stimulus has had a “big” negative impact (7 percent) as those who say it has had a “big” positive impact (8 percent).

GOOD PLACE TO DO BUSINESS: The region’s business executives continue to say that doing business in Greater Washington is easier than in most other places in the United States – by 64 percent to 19 percent in the December 2009 survey.

The Greater Washington Board of Trade’s Business Outlook Index is made up of the Current Conditions Index and the Future Expectations Index. Since February, the region’s overall Business Outlook Index increased from 40 to 65, a 25 point jump. During the same period, the Current Conditions Index increased from 28 to 46 and the Future Expectations Index increased from 52 to 83.

Source: The Greater Washington Board of Trade