First Business Economic Survey Northeast Wisconsin Indicates Decreased Profitability In 2013
APPLETON, WI, – Dec. 6, 2013 – For the first time is several years, Northeast Wisconsin Businesses saw decreased profitability in 2013 compared to 2012, according to a report released today by First Business Bank at the New North Summit. 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 showed positive increases in many of the key economic indicators surveyed.
The report indicates that 39 percent of businesses reported decreased Profitability in 2013 compared to nearly 54 percent in 2012. In addition, a significantly lower proportion of businesses saw increased Profitability, 41 percent in 2013 compared to 30 percent in 2012.
“While this sounds like bad news, it’s really just a leveling-off in the recent upswing in the Northeast,” says Dennis Winters, Chief of the Office of Economic Advisors, Wisconsin Department of Workforce Development. “We have seen steady growth over the last several years, and we are still adjusting to the rate of that growth.”
Sales Revenue in the Northeast remained fairly stable, with just over 50 percent of firms reporting increased sales revenue. Another key economic indicator, Number of Employees remained fairly consistent in 2013. While the number of firms that reported increased Number of Employees went from 36 percent in 2012 to 23 percent in 2013, more than 60 percent of businesses reported unchanged employee numbers.
Northeast businesses reporting unchanged Overall Wages was significantly higher at 37 percent this year versus nearly 28 percent in 2012. Consistent with 2012, almost 62 percent of Northeast firms reported increased Operating Costs in 2013. The number one reason businesses chose for the low performance in 2013 was “Domestic Sales Shortfall”, a top contributor to low performance since 2009.
“Despite lower numbers is many economic indicators this year, the New North continues to be optimistic. They are planning for the coming year and are charging forward,” says Mickey Noone, President – Northeast Region of First Business Bank. Noone says it’s encouraging to note that 77 percent of firms expect better performance in 2014, projecting an overall positive outlook.
Each year the survey asks a current event question. In 2013, Businesses were asked to rank the top three criteria that attributed to their improved performance. The majority of firms in the Northeast attributed improved performance to Improved Internal Efficiencies (52.7%), Increased Sales Efforts (47.9%) and Increased Marketing Efforts (52.7%).
First Business Bank has been conducting the economic survey of Northwest Wisconsin for the past six years. The survey was based on the responses of 382 businesses across the county. 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.