September 2004

Businesses Lower Expectations about Local Economic Performance over the next six months

According to the September 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 35 percent of respondents expect general business conditions to get better over the next six months. This is down from 40 percent in the June 2004 survey. Meanwhile, with regard to own activity, a net 41 percent of reporting firms expect increased activity in the next six months compared to a net of 31 percent in June 2004. The drop in confidence about general business conditions was most evident in construction, wholesale and retail trade, and personal services.

The September 2004 survey indicated that about 54 percent of reporting firms experienced higher sales and about 25 percent experienced lower sales in the past six months compared to sales in the fourth quarter of 2003 and the first quarter of 2004. In addition, the past six months witnessed a decline in the percentage of firms indicating that they had increased employee compensation from 51 percent to 42 percent between the June 2004 and September 2004 surveys. .

Summary of Returns
   September 2004

Survey Responses
Disaggregated by Sector/Activity

Summary:

The September 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 September 2004 survey continued its downward trajectory from its highest recorded level which occurred in the December 2003 survey. The most recent survey found that 44 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 June 2004 survey found that 49 percent of the reporting firms anticipated improved business conditions while 9 percent expected worsening conditions.