8/14/2019 Recovery in Years

1/2

B U S I N E S S P U L S E

Executive Summary: End of Q3/08

BusinessLeaders:

Recovery

Measuredin Years

The financial meltdown hasraised havoc with the economy.Business Leaders in NortheasternWisconsin - the rest of the worldas well - are all wondering how

long itll take to recover.The Nicolet Bank Business Pulse ,shows 49% of business leadersbelieving it will take the economySeveral Years to recover from itscurrent mess. A smaller percentage(45%) says it will take a Couple of Years to recover. Six percent sayits just a Bump in the Road .

The most recent Nicolet Bank Business Pulse was conducted inOctober between the 13th and20th. Since then, conditions haveworsened. During the week thestudy was conducted the Dow was9,300; The SP 500 was 1,000. Sincethen, weve elected a new presidentand watched indexes across theglobe plunge even lower.

Full Frontal

Financial ImpactThe downturn has had animmediate impact on the personalinvestments of business leaders:Nine-of-10 (93%) say it has hada Negative Impact (59% saySignificant Negative Impact; 34%say Somewhat Negative .)

(Fully 93% of us want to knowwhat the 7% were doing to havedodged the bullet to their Personal

Investments! Even Warren Buffetlost $22 Billion of his net worthsince September.)

Sixty-nine percent say the downturnhas had a Negative Impact ontheir business. (15% say Significant Negative Impact; 54% saySomewhat Negative .)

There are some differences betweengoods producing companies andservice providing companies. Interms of negative impact, the twogroups are generally similar: 66% of

goods producing leaders expresseda negative impact compared with70% of service producing companies.Almost one-third (31%) of goodsproducing companies have notexperienced any impact comparedwith 14% of service companies.

A few (4%) of the service companieshave seen a positive impact on theirbusiness, while none of the goodsproducing companies experienced

the same. (Some of the serviceproducing companies may beproviding services to assist goodsproducing companies in dealingwith the downturn, or perhaps areselling products that have a lowprice niche such as The Dollar Store,Walmart, etc.)

Thirteen percent of the servicecompanies are not yet sure what theimpact will be compared with 3%

of the goods producing companies.There are no differences by sizeof company.

SeveralYears to Recover

Recovery in a Couple

of Years

48% 45%

7%

Just a Bump in the Road

How will the financialmeltdown impact our

economy in the future?

8/14/2019 Recovery in Years

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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) andMenominee, Michigan. It is designed and implemented by Intellectual Marketing, LLC.

Participants include: 27% in manufacturing; 24% in services; 18% retail trade; 4% wholesale trade;5% finance, real estate, insurance; 5% in transportation, communications, utilities; 5% in construction;11% in other industries. 21% have fewer than 6 employees; 34% have 6-25; 15% have 26-50;12% 51-100; 11% 101-250; 2% 251-500; 4% 501-1,000; 2% have 1,001 or more.

QUESTIONS to Dr. David G. Wegge (920) 217-7738; david@intellectualmarketing.com

What Are Leaders Doing?Business leaders were asked whatactions they initiated as a resultof the downturn: 57% indicatedthat they discussed it withtheir management team; 45%re-evaluated their companysfinancial position and/or increased

their due diligence of companiesthey do business with (44%).

Nearly a third (32%) met withtheir banker; 22% discussed theissue with their Board of Directors;4% studied their exposure;2% changed the companys401(k) plan.

Few differences exist betweengoods producing companiesand service providing companiesregarding actions taken. Goodsproducing companies aresomewhat more likely toengage in more due diligence(50% v. 39%) and are more likelyto have met with their banker(39% v. 27%).

In terms of size of company, thosewith more than 500 employeeswere more likely to have createdan internal group to study theirexposure (14%) compared withcompanies with 500 or feweremployees (4%).

Smaller companies (500 or feweremployees) were more likelyto re-evaluate their financialpositions (49%) compared with29% for larger companies.Naturally, some of the largercompanies may have a greaterfinancial foundation to fall backon than some of the smallercompanies.

Whos to Blame?Theres been an awful lot of fingerpointing during this disaster and there appears to be plenty of blame to go around. Most (81%)business leaders around herethink Wall Street bears the MajorResponsibility; 54% ascribe Major

Responsibility to Congress; 23% toConsumers; 19% to President Bush.

When asked how muchconfidence business leaders havein individuals/groups to solve theproblem, 53% have a Great Dealor Moderate Level of Confidencein the private business sector;47% have (had) a similar viewof John McCain; 46% for BenBernanke; 44% for Henry Paulson;

21% for Barack Obama; 21% forRepublicans in Congress; 18% forSEC Chair Christopher Cox; 17%for financial foreign investmentsand; 11% for Democratsin Congress.

A slim majority of businessleaders (57%) support the $700billion dollars bailout that becamelaw just two days before thissurvey was conducted. Of those

supporting the bailout: 6% S trongly Favor the bailout; 24% Moderately Favor it; 27% Slightly Favor it.Thirty-nine percent were opposed(17% Strongly; 14% Moderately;8% Slightly). Four percent arenot sure.

First a Perp Walk thenWhat will help prevent this inthe future? A majority of Business

Leaders in NEWi (60%) saySignificant Jail Time andfines would be very effective.

Thirty-eight percent say stricterenforcement of existing laws;31% say restrictions on CEOcompensation; 28% see class-action suits as effectivetools/threats.

Fully 25% want to increase federalregulation of financial institutionsand 13% want mandatoryrestructuring of Boards of Directors. What next?

Summary Nicolet Bank data suggest thatgoods producing companies arefeeling an immediate impact of this downturn and, as is often thecase, the impact on service provid-ing companies lags a bit behind.The consensus among BusinessLeaders in Northeastern Wisconsin

seems to be that there wont be aquick end, weve not yet reachedbottom and in the end, nearly allcompanies will feel the pain.

While business leaders do expressmodest support for the recentbailout, there is not a lot of confidence in various politicalactors or groups to solve theproblem(s).

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