Friday, January 23, 1998

Survey finds business owners optimistic about coming year

By DOUG WILLIAMSON / Abilene Reporter-News

Abilene business owners expect slow, gradual growth this year.

The annual Condley and Company Abilene Business Climate Survey, released Thursday, found the general attitude to be improving.

"I am seeing a slight increase in optimism over the prior two years," said Ray Ferguson, CPA, Condley partner and coordinator of the survey.

"People are overall expecting growth to be about the same pace, but anticipating increased growth in net income, probably due to steps they have taken to improve their businesses' bottom lines."

The service industry is more optimistic than retailers, a turn-around from last year.

"It could be significant that the service sector is starting to experience the growth that retail has been experiencing in these surveys the last few years," he said. "In a typical economic cycle, the retail industry experiences growth and recovery first, followed by the service industry about two years later. This could indicate that the natural business cycle is coming to an end, which means we could experience a slowdown in growth in the near future."

Fifty-three percent predicted increased employment in 1998, compared with 36 percent in 1997. The number of businesses expecting reduced employment is miniscule -- 7 and 5 percent in 1998 and 1997, respectively.

However, the business owners expect to have a harder time finding employees and anticipate a decline in employee quality. Ferguson said this trend has appeared in the last several surveys, but is greater this year.

Ferguson noted that inventories will not be increasing this year. Only 15 percent of the companies surveyed expect to have more inventory at the end of 1998.

"This is a positive sign since inventory increases result from declining sales," he said.

Among the other findings of the seventh annual survey were:

n Employers reported payroll was one of the hardest regulations with which to comply.

n Medium-sized companies, ones with 10-50 employees, are increasingly optimistic this year. Companies with more than 50 employees are expecting the greatest increase in hiring employees.

n Only 13 percent are going without workers compensation coverage, the lowest figure in six years.

n For the third consecutive year, businesses in the workers compensation program or those purchasing alternative coverage continue to be more optimistic than those going without coverage.

n International trade is increasing. Thirty-one percent report they are buying from or selling to foreign markets. That is the highest percentage in six years.

n Only 2 percent list factors they control as a primary factor impacting their businesses.

n Employers expect sales, technicians, clerical and computer positions to be the most difficult to fill.

The surveys were distributed through the Abilene Chamber of Commerce newsletter. Fifty-five surveys were completed and returned.