2010 Economic Forecast by shashislk

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									                                                      Valley economic
                                                       Forecast 2010
          Key eConomiC
       indiCator QueStionS                  Summary
                                            Between the months of July and October 2009 Baird Williams & Greer
looKing ahead to 2010, do you feel the      contacted chambers of commerce throughout the Valley to encourage
u.S. unemployment rate will:                their members to respond to a survey regarding their views on economic
  36.4% Decrease                            and business trends in 2010. Over the course of three months, over 150
  48.1 Increase                             businesses voiced their opinions on everything from unemployment to
  15.6% unsure                              the banking industry to the real estate market, touching on issues that
                                            are currently affecting them professionally. From the results collected,
do     you generally agree with the         Baird Williams & Greer developed a report that forecasts the business
reSponSe     of    u.S. houSe of
                  the                       and economic climate in 2010, based off the attitudes of small and
repreSentativeS      Senate toward
                   and                      medium-sized businesses across the Valley.
the Current eConomiC ChallengeS?
  31.9% Yes
  68.1% No
                                            about the Sample ColleCted
                                            Local businesses were asked 35 questions to gage their attitude toward
                                            the economy in 2010 and voice their opinions on trends that we will see
do    you antiCipate the   arizona   real
                                            in the New Year. In an effort to report the most accurate information,
eState marKet will See inCreaSed SaleS
                                            Baird Williams & Greer polled a random sample of local businesses
in   2010?
                                            by inviting Valley chambers to ask their members to participate in the
     61.1% Yes
                                            survey. By outreaching to local chambers, Baird Williams & Greer
     38.9% No
                                            knew that they would get a pool of businesses that are headquartered
                                            in Arizona. Therefore, the survey reflects more accurately the trends
do you antiCipate that the valueS of
                                            happening in Arizona’s business community.
arizona’S real eState will inCreaSe in
2010?
  35.4% Yes                                 partiCipating ChamberS
  41.0% No                                     •   Apache Junction Chamber of Commerce
  24.3% Uncertain                              •   Arizona Hispanic Chamber of Commerce
                                               •   Buckeye Valley Chamber of Commerce
do    you expeCt a Change in overall           •   Chandler Chamber of Commerce
Staff wageS in   2010?                         •   Fountain Hills Chamber of Commerce
     23.0 %Yes—we expect an increase           •   Mesa Chamber of Commerce
     in earnings                               •   Scottsdale Chamber of Commerce
     19.4% Yes—we expect a decrease            •   Southwest Valley Chamber of Commerce
     in earnings                               •   Tempe Chamber of Commerce
     57.6% No change is expected
                                            Size of buSineSS partiCipating
in 2010, where do you plan to inCreaSe      Based on number of employees not revenue
Spending?                                      • Less than 10 employees: 52.8%
   12.3% New product or service                • 10 – 100 employees: 29.9%
   17.7% IT                                    • 101-499 employees: 10.2%
   9.8% Facilities Expansion                   • 500-999 employees: 1.5%
   30.0% Marketing & Communications            • 1,000 employees or more: 5.5%
   46.2% I don’t plan on increase           These results conclude that the bulk of trends will be focused on small to
   spending                                 medium sized businesses with no more than 100 employees, the backbone of
                                            Arizona’s economy.

     6225 North 24th Street, Suite 125
           Phoenix, AZ 85016
        Telephone: 602-256-9400
           Fax: 602-271-9308
            www.bwglaw.net
                                                                  Valley economic Forecast 2010




      ConCluSion
      bwg eConomiC foreCaSt 2010 prediCtionS
      The 2010 Baird Williams & Greer Economic Forecast survey demonstrated major trends that will
      impact their business, enabling them to plan ahead as we gear up for 2010. From the over 150 small-to-
      medium sized businesses surveyed across the Valley, Baird Williams & Greer 2010 Economic Forecast
      predicted the following six major trends will occur in Arizona during the New Year:

      major trendS foreCaSted for 2010
          •   Small and Medium-sized Business expect the economy to improve in 2010.
          •   Small and Medium-sized Business anticipate the unemployment rate to increase in Arizona
              and nationally.
          •   The bulk of Small and Medium-sized Business in Arizona do not anticipate hiring more staff
              in 2010.
          •   Small and Medium-sized Business predict that the banking industry will begin to show signs
              of stability in 2010.
          •   Small and Medium-sized Business forecast that the real estate market will begin to make a comeback.
          •   Small and Medium-sized Business see the biggest problem affecting their business is cash flow.
          •   Small and Medium-sized Business forecast an increase in consumer spending.
          •   Small and Medium-sized Business predict a small growth rate of thier business, indicating
              stability in 2010.

      Below is a compiled list of key questions that indicated economic trends in 2010 for Arizona’s small-to-medium
      sized business community. Each question is outlined with a summary, describing the economic trends forecasted
      by the Baird Williams & Greer 2010 Economic Forecast.

      Key ChartS demonStrating important eConomiC and buSineSS trendS
      Exactly 156 of the participating businesses responded to the question regarding how they felt about
Q.1   the prospects for the US Economy. The chart below indicates that businesses are overwhelmingly
      optimistic about the US economy, but other questions demonstrated that this optimism is not spread
      to the world economy where only 35.7% of respondents were hopeful.




                                       6225 North 24th Street, Suite 125 Phoenix, AZ 85016
                                       Telephone: 602-256-9400 Fax: 602-271-9308 www.bwglaw.net
                                                              Valley economic Forecast 2010




       As reports now show there is a turnaround happening with the economy, with experts believing that
Q.4    we will now see the economic situation will improve in 2010 as the worst is over. While the economy
Q.20   is showing positive signs for businesses, companies have shifted their focus on the effects it has on
       consumers. The response to question four indicates that more than half of the companies surveyed
       (52.6%) believe that the unemployment rate will increase in Arizona and nationally. In addition, as
       question 20 (below) demonstrates 44.7% of the business surveyed do not plan on hiring new employees
       in 2010, even though they anticipate seeing an increase in revenue though just slightly between 1%-
       10%. (see question 18 & 29)




                                     6225 North 24th Street, Suite 125 Phoenix, AZ 85016
                                     Telephone: 602-256-9400 Fax: 602-271-9308 www.bwglaw.net
                                                                         Valley economic Forecast 2010




             During the time of the survey (taken from July – October 2009), businesses in Arizona predicted
             overwhelmingly (64.4%) that the banking industry will show signs of stability during 2010. This is a
     Q.7     remarkable sentiment given that during the months of August and September, four local community
             banks closed their doors and negative reports flooded news stands about the banking industry toward
             the end of October. This could reflect a sentiment among businesses in Arizona that believe the strong
             banks are being singled out, as the weaker banking institutions are forced to close their doors.




             A major trend throughout the nation during the late summer/early fall of 2009 was the difficulty for
             businesses to have access to capital and/or loans to keep their businesses afloat. While a clear majority of
     Q.9     business owners that responded to the survey did not apply for a business loan, 73.1% of those who did
             apply found it difficult to get a business loan or line of credit because of the state of the banking industry.




what are your planS for expanSion
in 2010?
   29.1% Organic Growth
   5.5% Mergers or Acquisitions
   54.3% No expansion plan in 2010
   11.8% Other



                                              6225 North 24th Street, Suite 125 Phoenix, AZ 85016
                                              Telephone: 602-256-9400 Fax: 602-271-9308 www.bwglaw.net
                                                               Valley economic Forecast 2010




       Mid-term of President Obama’s first year in office, his poll numbers dropped and people felt less
       confident in his Administration and Congress. Local businesses surveyed demonstrate the same idea,
Q.10   as a little more than half of respondents did not agree with President Obama’s approach toward the
       US economy.




       Consumers’ attitudes toward the economy are generally believed to dictate their spending habits,
       which greatly affects local businesses. For question 12 of the Baird Williams & Greer Economic Forecast
Q.12   for 2010, businesses believed that consumers were not confident that the US economy would improve.
       Though as question 13 demonstrated (asked businesses whether they believed there would be an
       increase in consumer spending), it does not have a direct correlation as a majority believed consumers
       would increase their spending in 2010.




                                      6225 North 24th Street, Suite 125 Phoenix, AZ 85016
                                      Telephone: 602-256-9400 Fax: 602-271-9308 www.bwglaw.net
                                                                   Valley economic Forecast 2010




       At the end of October 2009, key economic indicators proved that the economy’s downward spiral had come to
       a halt. As experts now believe the economy is on the rise, the Barid Williams & Greer survey demonstrated a
Q.18   similar read out as: 41.0% of Valley businesses believe that their company’s revenue will increase moderately;
       7.6% believed that it will increase substantially; and 33.3% believe it will neither decrease or increase. This
       result demonstrates that the majority of businesses will see stability in 2010 or an increase in revenue.




       With companies anticipating a slight increase in revenue, 56.9% of Valley businesses estimate seeing a
       revenue growth rate with 43.1% of businesses forecasting an increase of 1% - 10% in 2010.
Q.29




                                        6225 North 24th Street, Suite 125 Phoenix, AZ 85016
                                        Telephone: 602-256-9400 Fax: 602-271-9308 www.bwglaw.net
                                                                     Valley economic Forecast 2010




           Companies overwhelming felt that the biggest impact on their daily operating costs was cash flow problems
           with 49.2% of businesses citing it as their biggest problems over the cost of IT, salary or other factors.
Q.26




do   you plan on widening your ServiCeS to inCreaSe          in 2010,   do you plan to out-SourCe any operationS
              2010?
your revenue in                                              that are Currently in-houSe?
  30.7% Yes—First Quarter                                       3.2% Yes—in order to broaden our services
  12.6% Yes—After first quarter                                 11.9% Yes—to be more cost effective
  40.2% No                                                      83.3% No
  10.2% Not applicable


                                           6225 North 24th Street, Suite 125 Phoenix, AZ 85016
                                           Telephone: 602-256-9400 Fax: 602-271-9308 www.bwglaw.net
                                                              Valley economic Forecast 2010




       While cash flow is a major problem affecting their bottom line on a regular basis, Valley companies
       forecast the decrease in consumer spending as the number one issue that will affect their business in
Q.35   2010. Over 46% of respondents cited consumer spending, while other key issues include a combination
       of competition and inflation rates as a major problem.




                                     6225 North 24th Street, Suite 125 Phoenix, AZ 85016
                                     Telephone: 602-256-9400 Fax: 602-271-9308 www.bwglaw.net

								
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