Annual First Business Economic Survey Results In Milwaukee Area Businesses Report Record 2014 Performance With Strong Optimism For 2015
BROOKFIELD, WI, – Dec. 11, 2014 – The results of the annual First Business Economic Survey were released today at the Key Industries for Wisconsin in 2015 and Beyond in Brookfield, WI. Each Fall, First Business takes the pulse of local businesses through an annual economic survey in the Greater Milwaukee Area, Dane County, and Northeast Wisconsin.
The survey focuses on the current year’s actual and next year’s predicted: sales revenue, total operating costs, capital expenditures, profitability, number of employee, changes in wages, and changes in pricing. First Business has annually underwritten the survey to help business owners achieve a broad based and up-to-date understanding of the local business climate, which includes information that can be utilized in planning for the coming year.
“After the last few years, it feels so good to see news like this,” commented Dave Vetta, President & CEO of First Business Bank. “2015 looks like it will be a very solid year for the Milwaukee area business community”. This is the sixth year we have done the survey, so you can see some clear trends emerging . Please note the survey was conducted in October , before the election. Also, note that the majority of businesses responding had 20-99 employees.
Today’s event has 4 cornerstones; First, we are very fortunate to hear for the third year in a row, from the Governor of the state of Wisconsin , Scott Walker, Second, a very esteemed panel from four different industries to talk about what they see happening in their businesses and industries, Third, it’s a chance for you to have visited with friends before and during the breakfast, and fourth, you will hear a brief recap of what other businesses have said in the survey.
A summary of the Greater Milwaukee Area findings released at today’s
- The Sales Revenue numbers were significantly more positive in 2014. The percent of companies reporting an increase in Sales Revenue increased by 27%, from 55% in 2013 to 72% in 2014. The percent of companies reporting decreased Sales Revenue this year fell by 22%, from 43% in 2013 to 21% this year.
- 80% of service businesses are projecting an increase in sales- an all time high.
- The percentage of companies projecting a decrease in Profitability for 2014 saw a statistically significant decrease from 44% last year to 31% this year.
- Majority of businesses that did not project any change to profitability last year , are projecting an increase this year.
- Significantly different from the last four years’ trends, companies reporting the same number of employees in Greater Milwaukee decreased significantly in 2014. The percent of businesses reporting an increase in the Number of Employees increased significantly by 28% points, from 18% in 2013 to 46% this year.
- Wages saw a statistically significant increase in Greater Milwaukee counties in 2014. The percentage of companies reporting an increase rose, while the percentage reporting no change or a decrease fell. The percent of firms reporting an increase in Wages grew from 46% last year to 56% this year. The percent of firms reporting no change in Wages fell by 9% points from 45% in 2013 to 36% in 2014.
- More companies shifted from no change to increases in Pricing. The number of companies reporting an increase in Pricing increased from 46% in 2013 to 56% this year. The number of companies reporting no changes to Pricing fell by 9% from 45% in 2013 to 36% in 2014. So , margins should improve as confidence and investing come back.
- Regarding operating costs, half of all sectors project an increase in operating costs. However, they continue to look for efficiencies and a bit cautious to increase costs , and manage variable expenses.
- A significantly higher percentage of companies are operating between 70%–90% capacity.
- Manufacturing sector seems to be leading the charge on capital expenditures for 2015.
- The highest percent of companies cited Domestic Sales Shortfall as a reason for low performance (40%). Behind Domestic Sales, businesses rank High Operating Costs and Staffing Issues (both 22%) as reasons for low performance in 2014.
- As you might expect , with labor shortage and increased production ,there is wage pressure . Raises thought to be 1-3% range.
- Companies in the Greater Milwaukee Area are more optimistic about their performance in 2015 than in any year in the history of this survey. A statistically significant record high of 86% of companies expect to perform better in the coming year, compared to73% of businesses in 2014. Companies that expect worse performance has decreased to 14% from the 2014 percentage of 27%; this change is also statistically significant.
About First Business
First Business Financial Services is a Wisconsin-based bank holding company, focused on the unique needs of businesses, business executives and high net worth individuals. First Business offers commercial banking, specialty finance and private wealth management solutions, and because of its niche focus, is able to provide its clients with unmatched expertise, accessibility and responsiveness. For additional information, visit www.firstbusiness.com.