First Business Bank: Economic survey of northeast Wisconsin indicates businesses saw improvements in 2010

Contact: Kathy Epping, 608-333-4406

For interviews with First Business executives, contact Jodie Johnson at 920-734-1800.

Sales Revenue, Profits up in 2010

(APPLETON, WI) – December 16, 2010 – Northeast Wisconsin Businesses saw increased sales revenue and improved profits in 2010, according to a report released today by First Business Bank at the invitation-only First Business Economic Forum.

The First Business Economic Survey of Northeast Wisconsin, 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, Insight Publications, and NorthStar Economics showed sales revenues jumped 30 percent -from 20 percent in 2009 to 50 percent in 2010. The percentage of firms showing increased profitability increased by 12.5 percent to nearly 45 percent.

“There is an upswing in economic activity,” says David Ward, CEO of NorthStar Economics. “While we are certainly not out of the woods yet, these improvements are moving us in the right direction.”

A key area of improvement is in the manufacturing sector where approximately 68 percent of manufacturing firms reported increased sales in 2010 compared to 17 percent in 2009. Capacity utilization is also on the upswing with 80 percent of businesses reporting they are operating at 70 percent capacity or higher.

Another key economic indicator, number of employees, increased significantly in 2010 with the manufacturing sector reporting a nearly 25 percent increase in the number of employees from 12.9 percent in 2009 to 37.7 percent in 2010. In addition, businesses in Northeast Wisconsin indicated a significant increase in wages for 2010, with 43 percent experiencing an increase in wage changes.

While major indicators are positive, 43 percent of Northeast Wisconsin businesses did not meet their self-imposed expectations for 2010. Ward says this points to the necessity for guarded optimism. “In many areas, we are still below pre-recession (2004-2007) levels,” says Ward. “We need to be prepared for a slow, steady climb out of these somber economic times.”

Each year the survey asks a current event question. In 2010, businesses were asked what techniques they used to weather the downturn in the economy. The number one response from businesses was

“improving internal efficiencies”. More than half of respondents indicated this was a major force that made the greatest difference in getting through the tough economy.

“Business expectations are not markedly better than last year,” says Mickey Noone, President – Northeast Region of First Business Bank. “But it’s clear that the business community is coping with economic conditions and using their resources to move forward.”

First Business Bank has been conducting the economic survey of Northwest Wisconsin for the past three years. The survey was based on the responses of 449 businesses across the county. The sample size has an error range of 5 percent and a confidence level of 95 percent. Full survey results are available under “Newsroom” at http://www.firstbusiness.com

ABOUT FIRST BUSINESS BANK

First Business Bank – Northeast is headquartered at 3913 W. Prospect Avenue in Appleton. In addition to offering commercial loan products, First Business Bank – Northeast offers a full line of deposit, investment, and equipment finance products through its affiliates First Business Bank – Madison and First Business Trust & Investments. Among these products are: remote deposit, treasury management, Internet banking, retirement plans, investment management services, trust services, asset-based lending, and equipment finance and leasing. For additional information, visit http://www.firstbusiness.com or call 920-734-1800.

Editor’s note: For a third party response to the survey, please contact Jeffrey Sachse at the Department of Workforce Development at 920.448.5268 or Jeff.Sachse@dwd.wisconsin.gov

Please find an Executive Summary below.

FOR IMMEDIATE RELEASE

Contact: Kathy Epping, 608-333-4406

For interviews with First Business executives, contact Jodie Johnson at 608-358-6289.

2010 FIRST BUSINESS ECONOMIC SURVEY OF NORTHEAST WISCONSIN

Executive Summary:

(APPLETON, WI) – December 16, 2010 – Key findings of the 2010 First Business Economic Survey of Northeast Wisconsin, which was conducted by the University of Wisconsin’s A.C. Nielsen Center for Marketing Research in September and October of 2010, indicate businesses saw increased sales revenues and improved profits in 2010. Northeast Wisconsin businesses are optimistic and project this upswing to continue into 2011.

Key Findings for 2010:

• The percentage of firms reporting increased sales revenues jumped from 20% to 50% in 2010 and the percentage of firms reporting increased profitability increased 12.5% to approximately 45%.

• As more businesses are reporting increased profitability, internal operations are improving with increased capital expenditures and job growth.

• Approximately 77% of businesses had unchanged or increased spending on capital expenditures in 2010, up from 62% in 2009.

• Similarly, over 75% of businesses indicated maintaining or increasing the number of employees in 2010 compared to 58% in 2009.

• Although many key indicators are up from 2009, they do not exceed the pre-recession levels reported in 2008.

• Almost 43% of businesses did not meet their self-imposed expectations in 2010. Both sales revenue and profitability decreased by approximately 40% of Northeast Wisconsin businesses in 2010.

• On top of these difficulties, 43% of businesses reported increased wage costs and 48% reported increased operating costs as a percent of revenue.

• Businesses self-reporting into the manufacturing industry reported the biggest change in performance year-over-year. Approximately 68% of manufacturing firms reported increased sales in 2010 compared to 17% in 2009. Profitability increased for 49% of manufacturing firms compared to 30% in 2009. As a result of increased performance, 37.5% of manufacturing firms reported an increased in employees in 2010 compared to 13% in 2009.

• Businesses reported high capacity utilization, with 80% of businesses reporting that they are operating at 70% capacity or higher.

This is the third year this study has been conducted. The 2010 First Business Economic Survey of Northeast Wisconsin survey was sent to 6,711 local businesses via email (3,000) and postcards (3,711); not for profit businesses and government agencies were not included in the survey. Of those, there were a total of approximately 163 valid online responses that adequately responded to questions pertaining to the key economic indicators. This equates to a response rate of approximately 5.43%. There were a total of approximately 286 valid online responses for mailed surveys which equates to a response rate of approximately 7.7%. This survey sample size has an error range of 0.05 and is at the 95 % confidence level. For the purposes of this report, Northeast Wisconsin is the 18 county region of Northeast Wisconsin, commonly referred to as New North. The counties include Outagamie, Winnebago, Calumet, Waupaca, Brown, Shawano, Oconto, Marinette, Door, Kewaunee, Sheboygan, Manitowoc, Fond du Lac, Green Lake, Marquette, Florence, Menominee, and Waushara.

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