After a long, steady climb out of the economic cellar, The Nicolet Bank Business Pulse leveled off at 113.1.
At the end of the first quarter, The Business Pulse reached 115.4 - its highest point since Q3/06. At the end of this quarter, CEOs continue to be cautiously positive. The Business Pulse recorded its lowest level in Q4 2008 at 63.8. The Pulse reached its highest point in Q4/03 when it finished the year at 137.4.
The Nicolet Bank Business Pulse© measures Current Economic Conditions compared to three months ago - as well as Future Economic Expectations of business leaders over the next three months. The Current Conditions Index and The Future Expectations Index are then combined into the overall Business Pulse Index. Scores higher than 100 indicate more positive than negative responses; scores lower than 100 indicate more negative than positive responses.
The Current Conditions Index dipped from 113.8 in Q1 2010 to the current level of 109.1. The Future Expectations Index remained essentially unchanged from 117.0 in Q1 2010 to its current level of 117.1.
Current Conditions
While CEOs still give more positive than negative ratings about the economy in general - and economic conditions in their specific industry - they are less positive today than in Q1. In Q1/10, there was a 34% net positive view (that is, 34% more CEOs saying the economy is Better than saying it is Worse) of the economy in general compared with 5% net positive today.
In their specific industry, there was a net positive 26% in Q1 compared with 10% positive today. Interestingly, CEOs are more positive today than last quarter in the four areas in which they have direct impact or control: Gross Revenue shows a net positive rating of 25% today compared with 19% in Q1/10; Net Profits show a net positive of 21% today compared with 10% in Q1; Number of Employees is +12% today compared with +2% in Q1. Capital Spending remained the same.
Future Expectations
The Future Expectations Index is at 117.1 compared with 117.0 in Q1/10. While the aggregate Future Expectations Index was essentially unchanged from Q1/10, the underlying factors that make up the index did see some changes.
On their perception of the general economy, CEOs had a net positive rating of 30% compared with a net positive rating today of +14%. In their view of economic conditions in their specific industry, they had a positive rating of +23% in Q1 and only a +5% today. On all other indicators, CEOs had a more positive view today than they had in Q1: Gross Revenue moved from a net positive of 17% in Q1 to a +26% today; Net Profits shifted from +15% in Q1 to +19% today; Capital Spending changed from a net negative of 2% to a net positive of 8%; Number of Employees were unchanged.
National Comparisons
In the latest Conference Board survey of CEOs, evaluations remained positive but flat at 62. The Conference Board Measure is based on interviews with about 100 CEOs nationally; a score of 50 on the Conference Board Measure of Business Confidence indicates the same percentage of Positive and Negative responses. Scores higher than 50 indicate more positive than negative responses; scores lower than 50 indicate more negative = similar to The Nicolet Bank Business Pulse© where a score of 100 means an equal percentage of Positives and Negatives.
Conference Board’s Consumer Confidence dropped from 57.7 in April-to-48.5 in September. (The base line for the Consumer Confidence Index is 100.) In Q1/10, there appeared to be some improvement in optimism, but it dissipated over the summer. The primary culprit appears to be consumer concern over the job market.
Summary
CEOs are less sanguine overall about the general economy and the economy in their specific industry, they display more positive views regarding how their organization is performing when it comes to revenues, profits, capital spending and employment.
How the Survey is Conducted
The Nicolet Bank Business Pulse© is a Quarterly Study of CEOs and business leaders in the New North Wisconsin (Brown, Calumet, Door, Kewaunee, Manitowoc, Marinette, Oconto, Outagamie, Shawano, Winnebago Counties) and Menominee, Michigan. It is designed and implemented by IntellectualMarketing, LLC. The survey, conducted September 17 - 29, 2010, was completed by 144 CEOs in the New North. Participants include: 28% in manufacturing; 26% in services; 19% retail trade; 5% wholesale trade; 6% finance, real estate, insurance; 6% in transportation, communications, utilities; 6% in construction; 6% in other industries. 16% have fewer than 6 employees; 27% have 6-25; 18% have 26-50; 12% 51-100; 17% 101-250; 6% 251-500; 1% 501-1,000; 3% have 1,001 or more.
Questions to Dr. David G. Wegge (920) 217-7738
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