June 2004

Businesses Lower Expectations about Local Economic Performance in the third and fourth quarters of 2004

According to the June 2004 Business Outlook Survey, business sentiment about future economic conditions in the local economy continued the downward trend that became evident at the beginning of 2004. A net 40 percent of respondents expect general business conditions to get better over the next six months. This is down from 50 percent in the March 2004 survey. Meanwhile, with regard to own activity, a net 31 percent of reporting firms expect increased activity in the next six months compared to a net of 40 percent in March 2004. The drop in confidence about general business conditions was most evident in health care, real estate, and manufacturing.

The June 2004 survey indicated that about 52 percent of reporting firms experienced higher sales and about 21percent experienced lower sales in the past six months compared to sales in the third and fourth quarters of 2004. The past six months witnessed some improvement for wage earners as the percentage of firms indicating that they had increased employee compensation rose from 45 percent to 51 percent between the March 2004 and June 2004 surveys.

Summary of Returns
   June 2004

Survey Responses
Disaggregated by Sector/Activity

Summary:

The June 2004 Business Outlook Survey found that firms in the local economy are much less optimistic about future business conditions compared to business sentiment at the beginning of 2004. The Business Outlook Index derived from the June 2004 survey continued its downward trajectory from its highest recorded level which occurred in the December 2003 survey. The most recent survey found that 49 percent of reporting firms felt that future business conditions are likely to improve while 9 percent indicated that conditions are likely to get worse. In comparison, the March 2004 survey found that 55 percent of the reporting firms anticipated improved business conditions while 5 percent expected worsening conditions.