Perspectives on a Recession: Economic Climate Survey Results

Karen Polcaro — Fri, 17 Jul 2009 18:47:27 +0000

There is a lot to be learned about our current economic climate through an inside look at the perspectives of regional business owners. To provide you with this valuable insight, ADAMS and The Board Forum have conducted two surveys (March 2009 and June 2009) of New England and New York businesses – ranging from private banking to advertising; architecture to technology, and more – to reveal how they are coping with this recession as we move through the year, as well as their plans for forging ahead towards doing business in a revitalized economy. The surveys included over 400 businesses, ranging from small to large enterprises. Trends that have emerged include:

Business owners are more optimistic
The marketplace is changing
Cash flow is improving

Optimism
Businesses are much more optimistic than they were at the close of the first quarter. Optimism among businesses has improved from 33 to 45%. Those respondents who feel they will gain market share in 2009 has increased from 15 to 70%. An overwhelming majority (73%) feel their business will emerge from the recession stronger than before; the minority reporting their business will emerge weaker or the same decreased from 34 to 27%.

Realities of a Changing Marketplace
While optimism has grown, reality has also arrived. The marketplace has changed as a result of the economic slowdown. In fact, over half of the respondents report that the competition has decreased. Revenue expectations reflected this new reality as the percentage of business owners anticipating a revenue decrease in 2009 grew from 24% in March to 42% in June. As a result of the changing marketplace 97% of respondents report making changes this year and 63% report they intend to make more changes.

Other signs of reality included a decreased percentage of respondents focusing on core business to maintain or grow, shrinking from 45 to 30%, and the percentage of respondents reporting a lack of capital hurting their business grew from 16 to 30%.

Cash Flow
However, since March, respondents report better cash flow. June’s survey reports 39% saw improvement, versus March’s 3%. The June survey shows cash flow remains unchanged for 48% of respondents versus 40% in March. Only 13% of the June respondents reported worsening cash flow versus 57% in March.

Signs of an Improving Economy
The number of businesses reporting their business is doing very well increased from 7 to 13% and those reporting modest growth increased from 10 to 23%. Meanwhile, those reporting their business is off decreased (from 67% to 55%). Businesses are showing signs of optimism; 65% plan to make capital investments this year if funding is available—an increase from 35% in the March survey.

Click here to review the detailed survey results. Learn how businesses are
managing to stay afloat or even thrive in this difficult economy.

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Perspectives on a Recession: Economic Climate Survey Results