Executive Summary
The following report highlights the findings of the 2007 First Business Economic Survey of Dane County, conducted by the A.C. Nielsen Center for Marketing Research between mid- September and November 2007. Now in its fifth year, the survey was sent to 5,625 businesses in Dane County with five or more employees and was addressed to the CEO, CFO, President, and/or business owner. Respondents answered questions regarding seven key economic indicators in each of the following areas: sales revenue, profitability, total operating costs as a percent of revenue, capital expenditures, number of employees, overall wage change, and operating capacity. New to the survey this year are questions pertaining to change in prices, expense changes, and the impact of the housing slowdown. The survey asks for both historical information (calendar year 2007) and forecasting (projections for 2008). The report follows this format.
While survey results are mixed, overall, respondents felt a slowdown in the local economy for 2007. Compared to expectations, more companies reported a poorer performance this year than last – a statistically significant difference of 34 percent versus 43 percent. Fewer firms reported an increase in profitability, sales revenue and capital expenditures for 2007 as compared to 2006. And for the first time since the survey's inception, more businesses' reported not meeting performance expectations than those that did meet expectations. On the bright side, the local economy appears to be strong still, with almost two-thirds of businesses reporting steady or increasing profitability compared to the previous year.Although more firms reported a decreasing or a similar percentage of total operating costs as a percent of revenue for 2007 when compared to 2006, the outlook for 2008 appears to be more pessimistic than in prior years, as the percentage of companies expecting higher performance in the new year has decreased. These overall market slowdown projections are more apparent among businesses with market-reach only into Dane County. Businesses with national/global markets have slightly better economy projections.
When comparing size of firm to the survey results, there are few year-over-year differences worth noting. For larger firms, the increase in profitability didn't match the decrease in capital expenditure due to increases in operating expenses as a percent of revenue, sending mixed signals of strength.
