2011 First Business Economic Survey shows optimism

Posted on Dec 16, 2011 :: Insight on Business, Web Exclusive.
Posted by of Insight Publications

Businesses in Northeast Wisconsin are optimistic heading into the new year, according to the 2011 First Business Economic Survey of Northeast Wisconsin, which was released late Thursday afternoon at an event at Butte des Morts Country Club in Appleton.

Sales and expenses were up for businesses in 2011, but going into 2012, companies are expecting sales and profitability to increase. In addition, 41 percent of businesses didn’t meet their in-house sales goals for 2011.

“Overall, there is measured optimism about the way things are going,” says David Ward, CEO of NorthStar Economics Inc., who analyzed the data collected. “There are still large sectors, such as real estate, which haven’t recovered yet, which is why so many people feel like the recession is still going on even though the economic data says otherwise.

The 2011 First Business Economic Survey of Northeast Wisconsin was conducted this fall by the University of Wisconsin’s A.C. Nielsen Center for Marketing Research. This is the fourth year that the survey has been conducted in Northeast Wisconsin.

Mickey Noone, president of First Business Bank-Northeast, says the survey started in 2008 – just as the economy was starting to head south so when “you look at the data collected, we can only go up. But overall, the general mood in Northeast Wisconsin is positive. Things are slowly getting better and when you compare what’s happening here to other parts of the state, we are doing better.”

In 2011, 56 percent of all survey respondents in Northeast Wisconsin reported higher sales revenue, up from 51 percent in 2010. Costs, however, also went up with 62 percent of businesses reporting an increase in operating expenses. That’s up significantly from 2010 when 48 percent of businesses saw their operating expenses rise.

Pricing was another area that saw an increase with 55 percent of businesses reporting increased pricing in 2011, up from 36 percent the year before. Going into 2012, businesses expect that operating costs and pricing will continue to rise.

Finding enough workers – or at least finding enough workers with the right set of skills – is a concern for some businesses, Ward says. The study found that 32 percent of businesses are having trouble finding workers with degrees from technical colleges.

“Fifty-nine percent of employers are hiring, which is great news. The bad news is that not all of them are able to find workers with the right skill sets to fill their needs,” he says.

As for 2012, Ward predicts the economy will grow 2 to 2.5 percent. “We were heading that way in 2011 before the earthquake hit Japan and the euro crisis hit – those surprises hurt the economy. I think 2011 showed us that we should expect surprises and plan accordingly,” he says.

To see full reports of the 2011 First Business Economic Surveys, please visit www.FirstBusiness.com. Viewers can not only see 2011 data, but also data from previous years as well as compare Northeast Wisconsin’s results with Dane County and Milwaukee and Waukesha counties.