8/14/2019 2007 Business Pulse - CEOs Uneasy About Conditions
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B U S I N E S S P U L S E
Executive Summary:Data Collected in May 2007
CEOs
Uneasy
About
Conditions
CEO confidence in NEWicontinued to decline at the endof the
first quarter of 2007. Thedecline in the overall businesspulse
index reflects both a dropin the current economic conditionsas well
as lower confidence infuture economic conditions.
The Nicolet Bank Business Pulse
dropped to 108.0 at the end ofQ1/07 down from 114.8 at theend of
Q4/06. (The Pulse reachedits highest point in Q4/03 when itfinished
the year at 137.4. Its lowwas Q4/01 (93.9) the quarterfollowing
9.11.01.)
The Nicolet Bank Business Pulse
measures Current EconomicConditions compared to threemonths ago
- as well as FutureEconomic Expectations of businessleaders over
the next three months.The Current Economic Index andThe Future
Expectations Index arethen combined into the overallBusiness Pulse
Index. Scores higherthan 100 indicate more positivethan negative
responses; scoreslower than 100 indicate morenegative than positive
responses.
The Current Conditions Index fellto 104.6 at the end of Q1/07
from110.0 at the end of Q4/06. TheFuture Expectations Index
droppedas well down to 111.3 at the endof Q1/07 from 116.9 in
Q4/06.
Current ConditionsThe Current Conditions Indexdecreased from
110.0 in Q4/06 to104.6 at the end of Q1/07. The mostsignificant
change from Q4/06 is in
perceptions of the general economyAt the end of the Q4/06, 29%
feltthe general economic conditionshad improved and 10%
indicatedthat conditions had declined for anet positive balance of
19 points.However, by the end of Q1/07 thenet balance of positive
to negativeviews of general economic conditionhad essentially
disappeared with 26%saying general economic conditionshad gotten
better while 25% sayingworse for a net positive balance of 1%T 3
Months CEOs
PAST 3 Months CEOs say:
say: General Economy26% Better| 25% Worse
Industry Economy25% Better| 24% Worse
Revenues50% Increase | 26% Decrease
Profits45% Increase | 27% Decrease
Capital Spending22% Increase | 27% Decrease
Employment24% Increase | 16% Decrease
Future Expectations
Optimism regarding the economicfuture also declined at the end
ofQ1/07. The Future Expectations Indeslid down from 119.5 at the
end ofQ4/06 - to the current measure of111.3. (The low point for
The FutureExpectations Index was 105.4 inQ4/01 following the
terrorist attackson 9.11.)
Im not getting information; I'm not managing.John Torinus,
President & CEO Serigraph, Inc
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8/14/2019 2007 Business Pulse - CEOs Uneasy About Conditions
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The Future Expectations Indexpeaked in Q4/03 at 147.4. Themost
significant changes in thefuture expectations also came inthe
perceptions of the generaleconomy. In Q4/06 32% feltgeneral
economic conditions had
improved while 10% felt they haddeclined for a net positive
balanceof 22%. In Q1/07, 24% say generaleconomic conditions
haveimproved and 19% indicate theyhave worsened for a net
positivevalue of only 5%.
NEXT 3 Months CEOs see:
General Economy24% Better| 19% Worse
Industry Economy28% Better| 14% Worse
Revenues46% Increase | 15% Decrease
Profits45% Increase | 23% Decrease
Capital Spending21% Increase | 21% Decrease
Employment
26% Increase | 9% Decrease
National Comparisons
Nationally, CEO evaluations inthe first quarter continued
toimprove slightly according toThe Conference Board Measureof
Business Confidence releasedApril 2007. The Conference BoardMeasure
rose to 53 in Q1/07from 50 in Q4.
The current condition index forCEOs nationally increased
from
47 to 49 and the future expectationindex nudged up from 50 to
53.(The Conference Board Measure isbased on interviews of 100
CEOsnationally; a score of 50 on theConference Board Measure
ofBusiness Confidence indicates thesame percentage of Positive
andNegative responses. Hence, theConference Board measure issimilar
to The Nicolet BankBusiness Pulse where a score of100 means an
equal percentageof Positives and Negatives,)
The Nicolet Bank Business Pulseand the Conference Boardmeasures
are usually mirroredimages. However, over the last twoquarters The
Nicolet Bank BusinessPulse has declined slightly, whilethe
Conference Board CEOmeasure has improved slightly.
In terms of how consumers seethings, the Conference Boardmeasure
of consumer confidencecontinued to decline from 109.0 inQ4/06 to
104 at the end of Q1/07.The Nicolet Bank Business Pulse
Consumer Confidence Studyconducted statewide in September2006 is
available
at:http://pulse.nicoletbank.com/nicoletbankpulse/nnb+business+pulse/executive+summaries/2006/
Investments
Although bullishness amongCEOs is down from Q4, CEOscontinue to
be somewhat morebullish than bearish on personalinvestments and
moneymanagement: 26% say they arebullish and 13% say they
arebearish with 60% neutral and
1% not sure. At the end of Q4/06,38% indicated they were
bullishand 5% bearish. The Nicolet BankBusiness Pulse also asked
howCEOs would invest $100,000 oftheir own moneyif they couldinvest
it today. CEOs would putabout $45,000 in stocks, $26,000in real
estate, $17,000 in moneymarket, $9,000 in bonds and$3,000 in
Treasury bills. Top stockpicks included: Exxon-Mobil,General
Electric, Microsoft,and Proctor & Gamble.
How the Survey is conducted
The Nicolet Bank Business Pulse is a Quarterly Study of CEOs in
NE Wisconsin (Brown,Calumet, Door, Kewaunee, Manitowoc, Marinette,
Oconto, Outagamie, Shawano, Winnebago
Counties). It is designed and implemented by
IntellectualMarketing, LLC.
Participants include: 28% in manufacturing; 25% in services; 19%
retail trade; 5% wholesale trade;6% finance, real estate,
insurance;5% in transportation, communications, utilities; 6% in
construction;7% in other industries. 16% have fewer than 6
employees; 33% have 6-25;19% have 26-50;
6% 51-100; 18% 101-250;2% 251-500; 3% 501-1,000;2% have 1,001 or
more.
Questions to Dr.David G.Wegge (920)
217-7738;[email protected]
Summary
CEOs and Business Owners inNEWi continue to have a senseof
uneasiness about economicconditions. From 2003 to 2004, theCurrent
Conditions Index averaged119.0, while from 2005 to thepresent the
average declined to108.9. The drop in the averageFuture
Expectations Index over thesame time frame has been evenmore
dramatic, declining from 135.9to 114.7. It is apparent that
CEOshave settled into an era of economicuneasiness in which the 600
pound
gorilla in every board room andCEO office is the
unsettlingthought that the economic worldcould change dramatically
andquickly with one significant terroristevent. Layered on top of
thatthreat are the ongoing concernsof growing international
tensions,globalization and the rising costs ofhealth care and
energy. All of thesefactors contribute to the uneasinessthat the
business communityappears to be feeling.
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