Arkansas Business readers are reporting an encouraging economic outlook for the rest of the year, based on a survey conducted last month.
During budget planning for 2012, 60 percent of the survey’s respondents said, they had projected their companies’ revenue would increase by at least 3 percent. By June, according to 47 percent of the respondents, actual revenue had been close to what was projected, and nearly 30 percent of the respondents indicated that their companies’ revenue either would be “significantly higher” or “somewhat higher” than what the company had budgeted for 2012.
Still, respondents are concerned about the economy, and more than half of them said their companies didn’t plan to blow money on significant purchases during the second half of the year.
About 200 people responded to the survey, which was conducted June 8-15, and answered some or all of the questions. The survey was open to Arkansas Business readers and was promoted at ArkansasBusiness.com and in Arkansas Business.
The purpose of the survey was to determine Arkansas Business readers’ perspective on the business climate, to see how business is going for their organizations and to gather their opinions on a few key business issues.
Here’s what we found:
Only 31 percent of the respondents said their companies were “sitting on cash” as a result of economic uncertainty. Another 39 percent said their companies hadn’t squirreled away cash because of the economy.
Twenty-three percent said their firms hadn’t increased cash holdings compared with pre-recession years, while 7 percent of the respondents said they didn’t know if their companies were holding cash.
A little more than half of the respondents said their companies made a “significant” investment during the first half of this year. (The survey left the definition of significant up to the respondents. What’s significant for one company may not be significant for another.)
Of the people who said yes, 30 percent said the investment was in equipment. That was followed by additional labor, 23 percent; inventory, 12 percent; and real estate, 10 percent.
The survey included only those four categories and the category of “other,” which received 14 percent of the responses. In addition, respondents could check more than one listed category.
Almost half (47.5 percent) of respondents expect their companies to make some significant investment by the end of the year.
Those investments are expected to be in equipment, 24 percent; followed by additional labor, 19 percent; inventory, 11 percent; and real estate, 10 percent. The “other” category received 13 percent, and the respondents could check more than one listed category.
Financing
The survey shows companies are continuing to shed debt, a result that won’t surprise bankers.
About 40 percent of the respondents said their companies’ debt levels had decreased this year, and only 17 percent of respondents said debt levels had increased at their firms.
About 45 percent of the respondents said their companies had maintained their previous debt levels.
What’s more, nearly two-thirds of the respondents said their organizations hadn’t looked for new financing in the past 12 months.
That financing could have been a new loan to refinance existing debt or lines of credit. Nearly a third of the respondents said their companies did look for new financing, and about 5 percent said they didn’t know.
For those companies that did seek new financing, respondents signaled that the difficulty of obtaining it was mixed. Just over half of them said money was easy to access, while 46 percent reported capital was harder to secure than it had been in the past. And one person said capital was not possible to obtain.
Issues
In April, President Obama signed into law the Jumpstart Our Business Startups Act.
The JOBS Act relaxed restrictions on how startup companies and small businesses can raise money from individual investors. It also allowed expanded “crowdfunding,” which permits startups to raise money from investors through Internet sites.
Only two people said the JOBS Act would change their business plans. Most respondents, 60.5 percent, said the act wouldn’t change their business plans, and 32 percent said they didn’t know. “Maybe” was the response of 6.8 percent.
As for new technology, most of the respondents said their companies hadn’t adopted any Internet-based “cloud” computing technology.
Only 36 percent of the respondents said their companies were using cloud computing technology, and 7 percent said they didn’t know if their companies used the technology.
Labor Market
As an indicator of the tight labor market, only 14 percent of the respondents said their companies’ staff turnover rate in the first half of 2012 was higher compared with their historic averages.
More than half said turnover was about the same, and 27.5 percent said it was lower.
Respondents also were quizzed on the pool of qualified applicants they have encountered in the past three years. One in four said that they found a “rich pool” of qualified applicants to choose from for most positions.
The remaining 75 percent of responses were split almost evenly between those who said they found a shortage of qualified applicants for most positions and those who found just enough qualified applicants for most positions.
Respondents
The respondents represented a variety of fields and professions, from accountants to people who work in the wholesale trade industry.
But the most responses, 9.6 percent, came from people who work in the construction industry. That was followed by a tie, 7.8 percent, between people in the insurance industry and those who work in banking, finance or investments.
More than half of the people who responded said they were in executive management; 12 percent said they were in senior management positions.
Just under 30 percent of the people who filled out the survey said they worked for firms that had fewer than 10 employees, and 10 percent of the respondents said their company had a workforce of 1,000 people or more.
Most of the respondents worked for small businesses. About one out of four people work for a company that has less than $1 million in gross sales revenue for 2011.
Twenty-eight percent reported gross revenue of $1 million to $4.9 million for their companies, and 9 percent of the respondents reported their firms had more than $500 million of gross sales revenue.
Sign up for Daily E-news
