Confidence in Regional Economy Soars

Spring Economic Outlook Survey of Business Executives

WASHINGTON, May 4 /PRNewswire-USNewswire/ -- Confidence in the Greater Washington, DC economy reached its highest point since February 2009, according to the semi-annual economic survey released today by the Greater Washington Board of Trade.  Business leaders have overall positive perceptions of current economic conditions that confirmed the outlook six months prior.  They also expect the economy to keep improving, as measured by the survey's Business Outlook Index.

"This is the highest level of economic confidence in Greater Washington's business community since the beginning of the economic downturn," said Jim Dinegar, president and CEO of the Greater Washington Board of Trade.  "Corporate executives and government officials should take special note of the significant spike in the number of business leaders who are positive about the state of the current economy."

HIGHLIGHTS

• CURRENT CONDITIONS:  Sixty-eight percent of regional business executives surveyed said current business and economic conditions in the region are "mostly good" while 16 percent said "mostly bad."  This is a 21 percentage point jump toward the positive since December 2009 and a 40 point leap since February 2009.

Forty-nine percent of business executives say their company's overall financial situation has improved over the past year, while 30 percent say it has stayed the same.  Twenty percent say it has declined.

"Those with an improved financial situation increased by a sizable 29 percentage points, while those reporting a deteriorating situation continued to get smaller," said Ron Faucheux, president of Clarus Research Group.

• BUSINESS STRENGTH:  Nearly three-fourths of Greater Washington's business executives expect their businesses to strengthen over the next year, up 14 percentage points since December 2009.  
• REVENUES AND SALES:  An increase in revenue and/or sales is expected by 73 percent of survey respondents.  In December 2009, an increase was expected by 55 percent.  Today only seven percent anticipate a decrease and 20 percent think revenue and/or sales will stay the same.
• JOBS:  Thirty-eight percent of those surveyed expect their businesses to increase employees in the next six months and seven percent expect their businesses to decrease employees.
• NEW BUSINESS INVESTMENTS:  Plans to purchase new equipment are up by 15 percentage points since December 2009.  Plans for expanding products or services are up by nine points, upgrading computer technology by nine points and making facilities "greener" by five points.
• GOOD PLACE TO DO BUSINESS:  The region's business executives continue to say that doing business in Greater Washington is easier than in most other places in the United States.  Today 66 percent say that it is easier to do business in the region, while 17 percent say it is harder.
• CONFIDENCE IN METRO:  The majority of business leaders – 58 percent of those surveyed – say that they are worried about the safety of the region's Metro system.  Thirty-four percent say they are "very worried" and 37 percent say they are "a little worried."  At the same time, most business leaders think the Metro will continue being an asset to the local economy.  Sixty-three percent say Metro will be more of an asset to the local economy over the next year, while only 16 percent say less and 18 percent say it will remain the same.
• STATE AND LOCAL BUDGET DEFICITS:  Seventy-seven percent of business executives are worried about state and local government budget deficits hurting the region's economic competitiveness and quality of life – 34 percent are "very worried" and 43 percent are "a little worried."  Twenty-three percent are "not worried at all."

The survey was conducted for the Board of Trade by Clarus Research Group, a nonpartisan Washington-based research firm, and was sponsored by Tatum, a leading professional services company supporting the office of the CFO.  

The sample included 200 top business executives across the Greater Washington region.  Interviewing for the survey was conducted by live telephone interviewers from April 19-26, 2010.

ABOUT THE BUSINESS OUTLOOK INDEX

The regional Business Outlook Index measures the level of overall confidence in and expectations for the future of the economy by a representative sample of top business executives in the Greater Washington, DC region.

The component of the Business Outlook Index measuring business executives' confidence in current economic conditions increased the most.  Today the index is 76 points, up 30 points from December 2009.  Business executives continued to express optimism in the future.  The index measuring expectations over the next six months to a year is 91, up nine points since December.

OTHER RESULTS

• BUSINESS FINANCING:  Today, businesses are still having difficulty getting loans; however, nearly half – 47 percent – expect easier access to credit in the next six months.  

"The credit crunch is beginning to thaw with 21 percent of business executives reporting that business financing and credit has gotten easier to secure, compared to 14 percent in December 2009," said Peter A.S. Pfeiffer, managing partner of Tatum's Mid-Atlantic practice, which sponsors the Greater Washington Business Surveys.  "Still, the current business financing and credit situation is a drag on regional business and must keep improving to ensure positive economic momentum."  

• HEALTH CARE REFORM COSTS:  Providing the health care coverage as mandated by recently-passed congressional legislation is expected to be more expensive by 65 percent of regional executives surveyed.  

For complete results, visit:  http://www.bot.org/media-center/publications/greater-washington-business-outlook-survey.aspx

SOURCE Greater Washington Board of Trade