Businesses Report Operating Cost Changes In 2013 First Business Economic Survey Milwaukee-Waukesha Counties
BROOKFIELD, WI, – Dec. 13, 2013 – Operating costs as a percentage of revenue changed significantly in 2013 according to a report released today by First Business Bank. The First Business Economic Survey of Milwaukee and Waukesha Counties, 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, indicates the percentage of firms reporting an increase in operating costs as a percentage of revenue declined significantly in 2013.
Fifty-three percent of firms reported an increase in operating costs this year, compared to nearly 62 in 2012. Additionally, almost 24 percent of businesses reported no change in operating costs as a percentage of revenue in 2013, compared to 16 percent in 2012.
“This is a key economic indicator of positive magnitude,” says Dave Vetta, President of First Business Bank-Milwaukee. “We are seeing some of our costs of doing business leveling off which will help our competitive bottom line.” Vetta points out that Milwaukee and Waukesha Counties saw an interesting trend reversal in sales revenue. The sales revenue course for Milwaukee and Waukesha Counties changed in 2013.
Companies reporting an increase in sales revenue reversed an upward trend reported since 2009. Companies indicating an increase in sales revenue fell by 6.7 percent. At the same time, companies that reported decreased sales revenue rose this year from nearly 39 percent in 2012 to nearly 43 percent this year.
“This may signal a leveling off within business sectors,” says Vetta. Companies in Milwaukee and Waukesha Counties reported virtually no change in profitability in 2013. Nearly 60 percent of businesses reported the same number of employees in 2013, similar to the last two years. Milwaukee and Waukesha County firms also showed slight increased wages and the percentage of firms reporting no change or a decrease in wages fell by 2.5 percent.
Pricing in 2013 also remained fairly steady with virtually no change from 2012. Additionally, more businesses are operating at or above 90 percent capacity, a trend that continues from last year. Businesses in Milwaukee and Waukesha Counties continue to be optimistic. A record percentage of firms, 73 percent, expect to perform better in 2014, the highest percentage since the inception of the survey.
“The challenges for Milwaukee and Waukesha County Businesses continue,” says Vetta. “But their optimism shines through as they continue to develop tactics and procedures that will propel them forward into the coming year.”
First Business Bank has been conducting the economic survey of Milwaukee and Waukesha Counties for the past six years. The survey was based on the responses of 349 businesses across the two counties. The sample size has an error range of 5 percent and a confidence level of 95 percent.
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.