First Business Economic Survey of Dane County Indicates Businesses Exceeded Expectations in 2013
(MADISON, WI) – December 17, 2013 – Dane County businesses exceeded expectations in 2013, according to a report released today by First Business Bank at the invitation-only First Business Economic Forum.
The eleventh annual 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 26 percent of businesses performed beyond their expectations for 2013 compared to 23 percent in 2012.
“While this is a not a statistically significant change from last year, this positive performance value is at its highest value since 2004,” says Scott Converse of the Wisconsin School of Business. “Also when we probe negative performance values, or ask why a firm performed poorly, this is the first year since the recession in which ‘housing slowdown’ was not one of the top 5 reasons for poor performance.”
The top tree reasons given for low performance were domestic sales shortfall, higher operating costs and rising gas prices. Explanations for better performance included increased sales revenue, improved efficiencies and increased markets. In addition, about 80 percent of Dane County businesses are expecting to perform better in 2014, close to pre-recession levels.
Sales revenue and profitability continue to trend upward for Dane County businesses. Although not statistically significant, sales revenue figures are trending closer to the pre-recession levels of 2007. The same can be said for profitability, as the percentage of firms that reported decreased profitability is lower than in previous years and closer to the figures reported in 2007.
“All of this information makes for some impressive news,” says Converse. “While there is still some uncertainty, the number of economic indicators that are at pre-recession levels signifies some big, positive changes taking place.”
The upward trend in number of firms reporting increased number of employees and increased wages also continued in 2013. More than half of firms reported increased wages for 2013, continuing a three-year upward trend. Seventy percent of firms classified as “other” increased overall wages, compared to 40 percent in 2012.
Dane County firms also reported significant higher capacity utilization in 2013. Thirty-seven percent of businesses utilized at least 90 percent of their capacity, the highest level since 2006. In addition, operating costs as a percentage of revenue decreased in 2013. A three-year rising trend for businesses reporting an increase in operating costs was reversed this year, decreasing from 59 percent in 2012 to nearly 55 percent in 2013.
In terms of pricing, no significant changes were reported; however firms that focus on the Wisconsin marketplace there is a significant number of firms that reported decreased pricing, a decreased from nearly 18 percent in 2012 to close to 7 percent in 2013.
“Dane County businesses have focused on efficiency to keep them competitive and it appears as though it is paying off,” says Mark Meloy, President and CEO of First Business Bank. “There is still work to do, but Dane County businesses are on the right track.”
First Business Bank has been conducting the economic survey of Dane County for the past eleven years. The survey was based on the responses of 359 businesses across the county. The sample size has an error range of 5 percent and a confidence level of 95 percent.
Click here to download the full survey report.
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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