Corey Chambas, President of First Business Financial Services, stated, “This survey reflects the fact that we have resilient and innovative local businesses that are able to do well regardless of national economic fluctuations. This is our fourth year of commissioning this study and it has provided us and other local businesses with valuable information for building budgets and projecting growth in the
Scott Converse, Director of Technology and Innovation Programs for Executive Education at the UW-Madison School of Business, noted, “The survey gives a unique look into the economic adaptability
While 2006 experienced some economic challenges for local and national businesses, including gas, oil and material hikes due to Hurricanes Katrina and Rita, a local labor shortage, and concerns over the war in Iraq, local businesses report that they performed fairly well and had an increase in profitability and a decrease of cost structure as a percentage of revenue.
These are some of the key economic indicators of the survey:
* Sales revenue: 60.6 percent of companies saw increases in 2006, down 2.6 percent from 2005. 72.7 percent expect sales to increase in 2007, up 3.9 percent from 2006 expectations.
* Profitability: 50.5 percent of companies saw increases in 2006, up 3.2 percent from 2005. 65.4 percent expect increases in 2007, up 8 percent from 2006 expectations.
* Number of employees: 36.2 percent of companies saw increases in 2006, up 2.5 percent from 2005. 37.9 percent expect employee increases in 2006, up 1.6 percent from 2006 expectations.
* Overall wage change: 76.9 percent of companies saw an increase in 2006, up 1.5 percent from 2005. 76.3 percent expect an increase in 2007, up 1.4 percent from 2006 expectations.
* Capital expenditures: 45.6 percent of companies saw increases in 2006, down 2.6 percent from 2005. 42 percent expect increases in 2007, down 6 percent from 2006 expectations.
* Operating costs as a percent of revenue: 66.1 percent saw increases in 2006, down 2.8 percent from 2005. 59.7 percent expect increases in 2007, down 3.8 percent from 2006 expectations.
The manufacturing sector continues to outperform other sectors (service, retail, technology) with stronger performances from the Business-to-Business firms over Business-to-Consumer companies. Capital expenditures are declining; however, this has had little short-term effect. If the trend continues long-term, it will have more impact. There is a shift in profitability, stating a lower percentage of smaller businesses reporting gains, and more gains in larger firms.
The increase in wages and employment is good news to