Harry S. Dennis III, for SBT
How do we do this? With a "gimme" (golf lingo) or a prayer (no comment). Truth is the data are in and I’m here to report same. It’s a bit different and a little more confusing from a year ago when I made a similar report, but let’s get on with it.
Before I share the actual stats, I would like to point out that two distinct TEC databases are involved: one representing TEC member responses in May 2002, from all over the US and Canada, and the second limited to Wisconsin and Michigan TEC member responses in June 2002. Comparisons between the two surveys will be made where it is appropriate to do so. The questions asked were similar in many cases but different in others.
When asked if the recession is behind us, 33% of the Wisconsin/Michigan sample said yes, 39% no, and 28% uncertain. Thirty-nine percent of the total US/Canada group believe the economy has rebounded, and 61% said it has not. Nearly 40% of the US/Canada group believe a rebound will occur in the third or fourth quarter of this year.
The Wisconsin/Michigan group was asked how the media-reported economic recovery is affecting their businesses. Twenty-four percent say the impact is beneficial, 39% say little or no impact, 28% flat and 9% see their business continuing to soften. It’s interesting that the US/Canada group anticipates capital-spending increases of up to 10 percent over the next 12 months.
However, looking over the next six months, 63% of the Wisconsin/Michigan sample think their businesses will perform better than a year ago and only 11% worse than a year ago.
Regarding hiring practices, 34% of the U.S./Canada group plans to increase total staffing by 5% over the next year. In Wisconsin/Michigan, 12% will add hourly employees, 7% salaried employees, and 22% both hourly and salaried. However, 12% will terminate employees and 47% plan to make no personnel changes. Thirty percent of the US/Canada group report that they will not make any personnel changes.
Thirty percent of the Wisconsin/
Michigan group see higher inflation in the second half of 2002, while 59% see lower inflation. An overwhelming 83% of Wisconsin/Michigan respondents feel that the stock market will remain mixed for the balance of the year.
In Wisconsin/Michigan, 64%
of the TEC members surveyed do
not intend to change their pricing during the second half. Of those
who intend to increase prices, the
average increase reported is 2 to 3 percent. Price decrease averages are in
the 3 to 5 percent range.
Forty-three percent of the Wisconsin/Michigan group expect Internet B-to-B transactions to increase over the next six months. Interestingly, 23% say this is not applicable, which is about the same percentage we reported a year ago. In the US/Canada group, B-to-B transactions were not even identified as a focused business strategy.
A recurrence of a 9/11 tragedy is perceived to be a potential happening by 36% of the Wisconsin/Michigan group between now and the end of the year. And while 22% don’t believe this will happen, 42% aren’t sure. The US/Canada sample was asked what impact the recent turmoil in the Middle East has had on their businesses. Twenty-two percent reported profit decreases, but 62% aid no decrease at all as a result of the Middle East crisis.
The Wisconsin/Michigan group was asked to state their opinions about further actions the Fed should take between now and year-end 2002. Thirty-six percent believe more of a stimulus is needed, but 57% are of the opinion that enough is enough.
For the record, the US/Canada group included 1,450 TEC respondents, and the Wisconsin/Michigan group numbered close to 200. Survey experts tell us that if we extrapolated (their word, not mine) these results to the general population of all businesses between $1 million and $1 billion in annual sales, the margin of error would be +/-3.4% with a 99% confidence rate!
When asked about the most important business strategy the US/Canada respondents plan to undertake over the next six months, the two most frequently mentioned were: a) reposition the company to accelerate growth and, b) recruit and hire top talent.
In other words, being proactive and not reactive seems to be the business strategy message of the day. This totally corroborates what we are hearing from our Wisconsin/Michigan TEC members, regardless of their size. In this case, one size does apparently fit all.
The other day, Jim Burt, CEO of WPC Brands (manufacturer of "Repel" insect repellent) in Jackson, and long-time TEC member made this observation:
"Through this recent economic gauntlet, we probably did no more or no less than any other smart business; but we never kept our eyes off our future, and because of that, we are having the best year we have ever had."
Until next month, keep "20-20ing" those eyes.
Harry S. Dennis III is the president of TEC (The Executive Committee) in Wisconsin and Michigan. TEC is a professional development group for CEOs, presidents and business owners. He can be reached at 262-821-3340.
July 5, 2002 Small Business Times, Milwaukee
