Dane County Economic Results Released
First Business Economic Survey of Dane County Indicates Increased Profitability for Businesses in 2012
Businesses Remain Uncertain About the Future
(MADISON, WI) - December 5, 2012 - Dane County businesses saw improved profitability in 2012, according to a report released today by First Business Bank at the invitation-only First Business Economic Forum.
The First Business Economic Survey of Dane County, sponsored by First Business Bank and conducted by the A.C. Nielsen Center for Marketing Research at the University of Wisconsin-Madison School of Business, showed that profitability was up for nearly 48 percent of businesses compared to 38 percent last year. Profitability for retail and service businesses performed better than those in other sectors.
"We saw what I would call a triple-play this year," says Scott Converse of the Wisconsin School of Business. "Retail, manufacturing and service businesses all saw increased profitability. However the numbers do indicate a little concern in increased operating costs."
The upward trend in number of firms reporting increased operating costs as a percentage of revenue continued in the 2012 data. Nearly 60 percent of businesses saw increased operating costs compared to 49 percent in 2009. Businesses serving Dane County reported higher increases in operating costs, nearly 65 percent, compared to firms targeting other markets.
"There is still a lot of uncertainty about the future," says Converse. "While indications are that the climate is improving, business owners are not willing to make bold predictions about the future."
Despite rising costs, employment numbers remained flat, with 57 percent of businesses reporting no change in employee numbers for 2012. Although still below 2007 pre-recession levels, there is a three-year increasing trend in firms reporting increased wages, from 38 percent in 2009 to more than 50 percent in 2012.
In terms of pricing, no significant changes were reported; however firms that focus on Dane County saw a significant increase in pricing from 40 percent in 2011 to more than 55 percent in 2012.
Dane County businesses are continuing to improve. While many Dane County business owners are uncertain about the future, more than 44 percent of businesses met their expectations. Interestingly, 62 percent of respondents indicated higher operating costs and rising gas prices as reasons for not meeting expectations, a big change from last year when the majority of businesses cited domestic sales shortfall as the reason they didn’t meet expectations.
"With a full decade of survey results to draw on, we can now begin to see trends," says Mark Meloy, President and CEO of First Business Bank. "While there continues to be uncertainty about the future, business owners seem to be gaining ground and are making necessary changes to stay profitable."
Each year the survey asks a current event question. In 2012, the question addressed the current economic and political climate on Dane County Businesses. A majority of Dane County firms reported that the current economic and political climate continues to pose uncertainty in performance, with many indicating it to have neither a positive nor a negative impact on performance.
First Business Bank has been conducting the economic survey of Dane County for the past ten years. The survey was based on the responses of 323 businesses across the county. The sample size has an error range of 5 percent and a confidence level of 95 percent.
ABOUT FIRST BUSINESS BANK
First Business Bank was established by area business owners and investors in 1990 to specialize in quality business banking for the local business community. First Business Bank offers a full line of financial services for businesses and business owners including: commercial lending, treasury management, private banking, retirement plans, investment management services, trust services, specialized lending, and equipment finance and leasing. For additional information, call 608-238-8008.
About First Business Financial Services, Inc.
First Business Financial Services (Nasdaq:FBIZ) is a $1.3 billion Wisconsin-based bank holding company that specializes in focused financial solutions for businesses, key executives, and high net worth individuals through its operating companies. Its companies include: First Business Bank - Madison; First Business Bank - Milwaukee; First Business Bank - Northeast; First Business Trust & Investments; First Business Equipment Finance, LLC; and First Business Capital Corp. For additional information, visit www.firstbusiness.com or call (608) 238-8008.
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First Business Financial Services, Inc.