Dane County businesses expect economy to improve in 2004

Dane County businesses are predicting increases in revenues and profits in the coming year, according to a survey sponsored by the School of Business and First Business Bank.

The Dane County Economic Survey, conducted in November and unveiled Wednesday, Dec. 10, at the First Business Seminar, took the temperature of 382 targeted Dane County businesses representing a broad spectrum of companies and found some promising signs for the local economy in 2004.

“Dane County companies are optimistic about 2004 with increases in sales revenue, profitability and employment. These trends are evident across all segments surveyed,” says Ted Beck, associate dean of executive education and corporate relations in the School of Business.

The survey revealed that Dane County firms are generally predicting increases in revenues, profits and capital spending. Companies also predicted fewer layoffs and an increase in hiring during 2004 compared to 2003, while fewer said they expected to resort to pay cuts. Nearly 80 percent predicted pay hikes for workers in 2004 – with 43.2 percent expecting to raise pay between 1 percent and 3 percent, and 35.9 percent planning raises of 4 percent or more.

Key findings of the survey, which was conducted by the business school’s A.C. Nielsen Center for Market Research, include:

• 78.3 percent of companies expect an increase in sales revenue in 2004, with 27.5 percent expecting an increase of 10 percent or more
• During 2003, 32.4 percent of respondents experienced a decline in revenue; only 8.6 percent say they expect a decrease during 2004
• 40.6 percent of respondents expect increases in hiring during 2004
• 7.5 percent of companies expect decreases in employment during 2004, versus 20.2 percent in 2003
• 73.8 percent of respondents expect improved profitability during 2004, compared with 49 percent in 2003

Survey results also indicate that the service sector appears to be outperforming the retail sector in capital expenditures, hiring and wage increases.

Companies operating in broader geographic markets are experiencing better results than those operating in Dane County exclusively in sales revenues, profitability, number of employees and larger wage increases. The survey found that 73.2 percent of companies operating in Dane County exclusively predict an increase in sales revenue during 2004, compared to 83.3 percent of companies operating in broader segments of the market.

And, while 18.2 percent of respondents reported declines in capital spending this year, compared with 2002, they are more bullish about 2004. The survey found that only 6.1 percent expected to decrease capital spending in 2004, while 50.6 percent expected increases.