BIA survey: Businesses pessimistic for 2009
It’s bad out there now, and most New Hampshire business owners don’t expect it to get much better next year, according to a recent survey.
The 2009 Index of Economic Conditions, a survey sponsored by the Business and Industry Association of New Hampshire and conducted by Portsmouth-based RKM Research and Communications, asked 301 New Hampshire business owners and top executives their expectations for the economy in 2009.
Nearly 45 percent said they felt that “poor economic conditions” were their biggest concern going into 2009 – a number nearly double from last year’s survey, when 23 percent said they were worried about the struggling economy.
Some 37 percent of the respondents expected economic conditions to get worse in 2009, with 23 percent expected them to stay the same and 33 percent expect them to get better. Last year, 38 percent expected economic conditions to get worse, 29 percent expected them to stay the same and 25 percent expected conditions to improve.
Some 80 percent of those surveyed said they expect that staffing levels will remain the same in 2009, with 11 percent expecting the number of workers at their companies to decrease — the lowest confidence level in four years, according to RKM. Some 8 percent expect it to increase.
In 2007, 6 percent of businesses expected the overall number of employees working at their company to decrease in 2008, 75 percent expected it to stay the same and 15 percent expected it to increase.
Among larger businesses, 17 percent said they expected to hire more employees, compared to 7 percent among smaller businesses. Sixteen percent of larger businesses were anticipating their staffs to decrease, compared to 11 percent among smaller businesses.
According to R. Kelly Myers, president and chief analyst for RKM, “these results indicate that smaller businesses are less likely than large businesses to make firing or hiring decisions in weaker economic times.”
While there is overall pessimism about the economy, 75 percent said they expect their revenues in 2009 will stay the same (45 percent) or do better (30 percent). Last year, 35 percent expected revenue to stay the same and 36 percent expected it to increase.
Nearly a quarter of those surveyed expected their revenue to decrease in 2009, compared to 11 percent who expected decreases in 2008. Forty-five percent expect revenue to stay the same and 30 percent expect it to increase.
Over half of the surveyed business owners (55 percent) said they are going to play it safe and keep capital expenditures the same in 2009 as this year. This is a significant drop from last year, when 47 percent said they were keeping capital spending the same.
For 2009, 25 percent said they believe they will be spending less on capital improvements, and 18 percent expect to spend more on capital investments. Last year, 18 percent of businesses expected capital expenditures to decrease and 34 percent expected to spend more on capital investments.
“These results suggest that, due to the present economic environment, many businesses will not be able to sustain growth in 2009,” said Myers. “Instead, they will try to remain competitive by tightening their belts and cutting costs wherever possible.”
“The situation is really tough right now for many businesses, given problems in the housing and credit markets,” said Jim Roche, president of the BIA. “We are in a recession, and businesses are struggling to remain competitive and make payroll in the midst of declining revenues, slowing business activity and falling consumer spending.”
Roche said state policymakers “must recognize that New Hampshire businesses are already under intense market pressure. Keeping New Hampshire’s cost of doing business as low as possible is important if we are to maintain employment for hundreds of thousands of working men and women throughout the state.”
To download a copy of the report, visit www.nhbia.org/uploads/File/RKM-BIA_2009_ Business_Outlook_Survey.pdf.
Cindy Kibbe can be reached at firstname.lastname@example.org.