Executive Summary
This report highlights the findings of the 2005 Dane County Economic Survey, which was conducted by the A.C. Nielsen Center for Marketing Research between September and mid-October 2005. The survey was sent to 5,190 businesses in Dane County with five or more employees and was addressed to the CEO, CFO, President, and/or business owner. The survey asked questions regarding seven key economic indicators in each of the following areas: Sales Revenue, Profitability, Total Operating Costs as a % of Revenue, Capital Expenditures, Number of Employees, Overall Wage Change and Operating Capacity.
Overall the economy performed on par in 2005. When compared to 2004, expectations were met or exceeded by slightly more than half of the companies reporting. However, a smaller percentage of companies reported an increase in sales revenue, operating costs, capital expenditures, profitability, and number of employees in 2005. Even though none of these reductions were statistically significant, the trends are worth noting.
The outlook for 2006 appears to be less optimistic than in prior years. According to the survey, significantly fewer Dane County businesses expect to have an increase in sales revenue, profitability, and number of employees in 2006. Additionally, the percentage of companies expecting a higher performance for 2006 reduced from 79% to 70%. Although 70% is still high, the reduction is of some concern. This less optimistic outlook might be in part due to the unexpected hike in oil and gas prices caused by two gulf-coast hurricanes – Hurricane Katrina and Hurricane Rita. The survey was conducted at the time of the two hurricanes.
Regionally there are few differences but some are worth noting. More companies operating in broader geographic markets are reporting positive performance in terms of sales revenue, profitability, and number of employees. In percentage terms, more of the larger companies are optimistic about the economy going forward. However, the manufacturing sector is strongly outperforming other sectors (retail, service, technology, etc.) – sales revenue, profitability, and number of employees are all stronger in the manufacturing sector. Additionally, Business-to-Business firms are in general outperforming Business-to-Consumer firms as well as those firms that operate in both spaces in terms of profitability and number of employees.
