June 2012 Pulse of the Local Economy Survey Most local business owners and CEOs remain upbeat about the local economy and their own businesses.
Although they are optimistic, it appears they are a little more subdued than 3 months ago as a few worries crept into their collective mindset.
Nearly 71% of the respondents felt their business would do better in the next 6-12 months. This is down from 85% in the March poll. A worry that has reared its head is inflation. Approximately 63% of respondents said they are worried about inflation. This figure is much higher than the 33% who said they were worried about inflation just 3 months ago.
Despite a slightly reduced optimism about the future, the immediate past was better for 44% of the local businesses polled and only 12% reported worse earnings. This compares with just 25% who said business was better in the last poll.
There was good news on the hiring front as well. Almost three-fourths of those polled indicated they plan on hiring employees in the next 3 to 6 months.
As for some of the spending that might take place, only 20% of respondents said they will increase their advertising expenditures in the next 12 months. Another 20% said they will reduce ad expenditures. About half of those surveyed indicated they will upgrade their business technology.
If sentiment means anything, realtors should be extremely happy. Slightly more than 94% of those surveyed thought it was a good time to invest in residential housing and about 83% indicated it was a good time to invest in apartment buildings. Interestingly, only 50% thought it was a good time to invest in commercial property.
As for other investments, 80% felt it was a good time to invest in U.S. stocks while only 60% felt it was timely to invest in Emerging Market stocks. Nearly 74% polled felt it was a bad time to be investing in bonds.
Approximately 63% felt that federal income taxes were too high. It was approximately the same number who felt California tax rates were too high. On the question of whether the corporate tax rate should be raised, lowered or stay the same, 25% felt the tax should be raised, 57% thought it should be lowered and 18% indicated the tax should stay where it is.
As for travel and entertainment, 62% said they will take about the same number of vacations in the next year as they did last year, while 22% said they will take more vacation time. The restaurant industry looks to have stabilized as about 92% said they will eat out just as much as they had over the last couple of years.
Since Facebook has been in the news a lot in the last few months, we wanted to know what percentage of our local business owners and CEOs used Facebook for their businesses. The result was split fairly evenly with those using Facebook at 40% of those polled.
If you are a business owner or a CEO and want to participate in our quarterly survey, please e-mail me at steve@wwmfinancial.com
By Steven R. Wolff, Managing Partner at Wolff, Wiese, Magana
For more information visit: www.wwmfinancial.com
Wolff Wiese Magana is an Investment Adviser registered with the SEC. Advisory services are only offered to clients or prospective clients where Wolff Wiese Magana and its representatives are properly licensed or exempt from licensure. This editorial is solely for informational purposes. No advice may be rendered unless a client service agreement is in place.
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