Business Leaders Economic Confidence Survey

Arkansas Edition

Final results

Opened on 11/17/13 & Closed 11/26/13

(12/13/13)

Response Demographics – by Industry

Manufacturing,19%

Healthcare16%

Technology13% Finance

11% Utilities10%

Marketing6% Construction

5% Food4%

Government4%

Education3%

Other11%

%OF TOTAL

Total

CEO

CFO, COO, CAO, etc.

Director

Other, please specify your title.

President

Vice President

Response Demographics – by Title

27% Plant Managers23% General Managers

CEO

Other

CxODirector

President

Vice President

41%

10%11%

21%

10%8%

70% of responses from companies with revenue above

$10M

Increase Significantly8%

Increase Slightly56%

No Change16%

Decrease Slightly15%

Decrease Significantly5%

Expected Sales

Revenue for Next 6 Months

64% expect Sales Revenues to increase (slightly or significantly) the first half of 2014. Wages follow suit.

Increase Significantly3%

Increase Slightly55%

No Change37%

Decrease Slightly3%

Decrease Significantly2%

Expected Wage

Change for Next 6 Months

Increase Significantly10%

Increase Slightly63%

No Change17%

Decrease Slightly11%

Decrease Significantly0%

Increase Significantly0%

Increase Slightly24%

No Change12%

Decrease Slightly35%

Decrease Significantly29%

Excluding Health Care

Health Care and Pharmaceutical Industry is negatively weighing down the results.

Health Care Only

Expected Sales Revenue - 1st Half of 2014

Increase Significantly7%

Increase Slightly33%

No Change35%

Decrease Slightly24%

Decrease Significantly1%

Expected Employee

Change for Next 6 Months

Although revenues are expected to increase, headcount and capital investments will change little.

Increase Significantly11%

Increase Slightly41%

No Change31%

Decrease Slightly12%

Decrease Significantly5%

Expected AR CapEx for

Next 6 Months

Much better1%

Somewhat better24%

About the same54%

Somewhat worse15%

Much worse6%

Overall Economic Condition

as Compared

to 6 Months

Ago

Much better4%

Somewhat better31%

About the same37%

Somewhat worse22%

Much worse5%

Change in Economic

Condition in Next 6 Months

35% expect Economic Conditions to improve in the next 6 months vs. only 25% felt the last 6 months had improved

Interest Rates Impact %of Total

Very High Impact 7%High Impact 26%Moderate Impact 30%Low Impact 28%No Impact 10%Grand Total 100%

Consumer Confidence Impact

%of Total

Very High Impact 8%High Impact 31%Moderate Impact 40%Low Impact 14%No Impact 7%Grand Total 100%

Debt Ceiling Impact%of

TotalVery High Impact 8%High Impact 21%Moderate Impact 26%Low Impact 29%No Impact 16%Grand Total 100%

2014 Congressional Budget Impact

%of Total

Very High Impact 9%High Impact 21%Moderate Impact 32%Low Impact 27%No Impact 11%Grand Total 100%

Very High Impact7%

High Impact26%

Moderate Impact30%

Low Impact28%

No Impact10%

Very High Impact8%

High Impact31%

Moderate Impact40%

Low Impact14%

No Impact7%

Very High Impact8%

High Impact21%

Moderate Impact26%

Low Impact29%

No Impact16%

Very High Impact9%

High Impact21%

Moderate Impact32% Low Impact

27%

No Impact11%

Most Arkansas leaders cite Consumer Confidence (79%) as the strongest impact to economic conditions.

What Else Impacts Your Company’s Economic Growth?

“Regulation and Compliance is the fastest growing area of our business.”

Take-a-ways

1. AR business leaders in all major industries responded

2. Majority expect revenues to increase 1st Half of 2014

3. However, headcount and capital investments will not trend closely

4. Overall economic conditions slightly improving for most industries

5. From a revenue projection standpoint, the Healthcare and Pharmaceutical industry is sick

6. While Consumer Confidence is cited as the most influential to economic growth, the National CCI remains flat to slightly down

7. Regulation and Compliance are big (and growing bigger) cost drivers for companies

Mike Stafford

501-255-7751

www.CEGpartners.com