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Q3 Survey Analysis – July 2009

August 4, 2009

Another quarter, this one shows an increasing number of establishments becoming profitable! I understand June was as usual an iffy month for many but not as bad as expected. Seems like all the positive talk and the increase in the stock markets just maybe having a positive impact. With GDP contracting for 4 consecutive quarters, the saying only the strong survive has an entirely new meaning. More than strength is required, foresight and a solid conservative bent are also needed. I suspect that keeping EQUITY within a company, enabling it to weather tough times, will have an entirely reinforced band of supporters. The practice of distributions to owners at all costs being the loser.
The first draft of the GDP numbers came out indicating the contraction was 1% in the 2nd quarter. The second and third drafts will likely show that is a conservative number. The latter part of July appears to be showing promise however!
Lets get into the numbers-
Profitability: 59% profitable definitely an improvement from the 53% profitable we reported last survey. We suspect intelligent cost cutting and controls have had an impact- those that use labor and other resources wisely win in this environment. The question regarding business increasing or decreasing over the last two weeks reflects the Independence Day holiday. From our vantage point, we suspect the reduction in sales was normal or less than normal – a positive.
One sign companies are very cautious is the caution in sales expectations- with a 4% drop in the numbers of companies expecting sales to increase this coming quarter. Time will tell if we are at the bottom or even starting the recovery of this recession, but one sign that is positive is the hiring expectations of companies has increased. Considering also the source of this hiring is referrals from internal staff, we suspect rehires are happening as demand warrants.

With all the talk on health care federally, we see for the first time in several surveys a reduction in concern for healthcare costs (in several cases we are hearing of reduced premiums per worker this renewal season!). Base pay, workers comp and state requirements all show hefty increase in concerns. When will the powers that be understand to DECREASE costs in labor will INCREASE hiring rates? Seems very simple for most to understand.
For additional results please download the survey results provided-

We have enclosed the entire Survey results below, if you have questions or would like to see additional areas explored please let me know.

daver@semperllc.com Semper

Click here to view the SurveyPDF Format (http://www.semperllc.com/index.cfm?page=president)

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