Picture of the Orr Center, home of the College of Business Page header is Business Conditions and Outlook Survey, University of Southern Indiana, College of Business

horizontal rule

 December 2005

Businesses Anticipate Improvement in Local Economic Performance over the next six months

Download the
December 2005 Survey
in pdf format

horizontal rule

According to the December 2005 Business Outlook Survey a net 34 percent of respondents expect general business conditions to deteriorate over the next six months. This represents a marked increase from -5 percent in the September 2005 survey. With regard to own activity, the net percent of reporting firms expecting to increase activity in the next six months was -- percent.  The more favorable outlook about general business conditions was most evident among financial institutions.

The December 2005 survey indicated that about -- percent of reporting firms experienced higher sales and about -- percent experienced lower sales in the past six months compared to sales in the first and second quarters in 2005. In addition, the past six months witnessed a decrease in the percentage of firms indicating increased employee compensation from -- percent to -- percent between the September 2005 and December 2005 surveys. Between the September 2005 and December 2005 surveys, the percent of reporting firms indicating that they expect most of their future e-commerce activity to be business-to-business transactions rose from 42 percent to 56 percent.

Summary of Returns
December 2005

Questions

Response

Improve/
Increase

Same

Worse/
Decrease

Unsure

(Percentage of Total Responses)
Business conditions in local economy in next six months 37 53 6 4
Level of activity of your firm in next six months 40 54 5 1
Capital expenditures of your firm in next six months 33 52 11 4
Employment by your firm in next six months 40 53 5 2
Average selling price of your firm in next six months 45 41 5 9
Access to financing by your firm in next six months 8 70 18 4
Employee compensation by your firm in last six months 60 38 2 0
Sales in last six months compared to previous six months 60 20 19 1

Survey Responses
Disaggregated by Sector/Activity

Questions by Industry

Response

Improve/
Increase

Same

Worse/
Decrease

Unsure
Manufacturing

(Percentage of Total Responses)
Business conditions in local economy in next six months 41 47 6 6
Level of activity of your firm in next six months 47 47 0 6
Construction
Business conditions in local economy in next six months 18 82 0 0
Level of activity of your firm in next six months 27 64 9 0
Real Estate
Business conditions in local economy in next six months 50 50 0 0
Level of activity of your firm in next six months 75 25 0 0
Retail & Wholesale Trade
Business conditions in local economy in next six months 25 50 13 12
Level of activity of your firm in next six months 25 63 12 0
Professional & Scientific Services
Business conditions in local economy in next six months 63 37 0 0
Level of activity of your firm in next six months 63 37 0 0
Health Care & Social Services
Business conditions in local economy in next six months 25 63 12 0
Level of activity of your firm in next six months 25 75 0 0
Other Services
Business conditions in local economy in next six months 20 80 0 0
Level of activity of your firm in next six months 20 80 0 0
Communications and Information
Business conditions in local economy in next six months 33 67 0 0
Level of activity of your firm in next six months 33 34 33 0
Finance and Insurance
Business conditions in local economy in next six months 86 14 0 0
Level of activity of your firm in next six months 43 57 0 0

Summary:

Results from the December 2005 survey indicate a substantial improvement in expectations about general business conditions in the local economy, reversing a trend of declining sentiment that began with the June 2004 survey.  Over the past four years survey respondents have consistently identified the following important challenges to their activities:  health care expenses for employees, availability of employees, and competition from other businesses. In the most recent survey, two of the three have been identified as the most pressing problems.  Consistently, over the past year, firms are more optimistic about their own prospects compared to what they think will be happening to the overall economy. The most recent survey found that 37 percent of reporting firms felt that future business conditions are likely to improve while 40 percent expect an expansion in activity level during the next six months.

horizontal rule

For additional Information:

Professor Mohammed Khayum
Department of Economics & Finance

Phone: 812/465-1681
Email: mkhayum@usi.edu

horizontal rule

 

 Business Conditions and Outlook Survey Home

USI College of Business Home   |   USI Home 

 

USI logo and link to USI home page

University of Southern Indiana

College of Business
8600 University Boulevard
Evansville, Indiana 47712