2014 Business Outlook Survey Results

Business Economic Survey

Your Target Market: □ Fargo-Moorhead□ Minnesota/ North Dakota □ Midwest □ Nationwide □ International

Number of Employees: □ 1-4 □ 5-19 □ 20-99 □ 100-499 □ 500+

Business Type: □ Agriculture □ Mining □ Construction □ Manufacturing□ Transportation, Warehousing

  □ Wholesale Trade □ Retail Trade□ Finance, Insurance, Real Estate

□ Business & Profess. Services □ Health Services

  □ Leisure/Hospitality □ Non Profit □ Other ___________

Business Classification:

□ Business to Business

□ Business to Consumer □ Both

Changes in 2012 to 2013 & Expected Changes for 2014Sales Revenue Operating Costs

Capital Expenditures Profitability

Number of Employees Compensation

Prices for Raw Materials Prices Received

Business Segments

____ Surveys Sent

____ Surveys Responses

____ Response Rate

Type of BusinessBusiness/Professional Services

15%

Retail Trade13%

Finance, Insurance, Real Es-tate13%

Other9%

Nonprofit9%

Leisure/Hospitality8%

Construction8%

Health Care7%

Technology7%

Manufacturing5%

Wholesale Trade4%

Agriculture2%

Transportation-Warehousing1%

1-420%

5-1936%

20-9930%

100-49912%

500+2%

Number of Employees

Fargo-Moorhead-West Fargo

43%

Minnesota/ North Dakota

39%

Midwest5%

Nationwide10%

International2%

Target Market

Business Segments

Business Changes from 2012 to 2013

Decrease No Change IncreaseDiffusion

Index*Diff. Index

2011-12

Sales Revenue 18.7% 11.6% 69.7% 51.0% 61.8%Prices Received for Products/Services 7.7% 31.4% 60.9% 53.2% 50.7%

Prices Paid for Raw Materials 2.6% 35.5% 61.9% 59.3% 69.5%Operating Costs as a % of Revenue 14.9% 16.9% 68.2% 53.3% 48.3%

Employee Compensation 2.5% 20.9% 76.6% 74.1% 79.3%

Capital Expenditures 8.3% 40.4% 51.3% 43.0% 52.5%

Profitability 17.5% 17.5% 65.0% 47.5% 50.7%

Number of Employees 7.6% 48.1% 44.3% 36.7% 37.9%

* The Diffusion Index is the percentage of respondents reporting an increase minus the percentage reporting a decrease. A positive index indicates expanding activity, while a negative index indicates declining economic conditions.

Business changes 2011-2014

Sales

Reven

ue

Prices

Rec

eived

Prices

Paid

for M

ater

ials

Ope

ratin

g Cos

ts

Emplo

yee

Compe

nsat

ion

Capita

l Exp

endit

ures

Profit

abilit

y0%

20%

40%

60%

80%

2011-122012-132013-14 (proj)

Percent of Businesses Reporting Large Changes from 2012 to 2013 (7 percent or more)

0.0%

10.0%

20.0%

30.0%

40.0%

Percent Reporting 7+ % Increase Percent Reporting 10+ % IncreasePercent Reporting 7+ % Decrease Percent Reporting 10+ % Decrease

Factors Positively Affecting 2013 Performance

Domestic S

ales Incre

ase

A Strong Sta

te Eco

nomy

Lower O

perating Costs

Technology Changes

Politica

l Sta

bility

Less

Domestic C

ompetition

Federa

l Govern

ment Regulations

Intern

ational Sales I

ncrease

Less

Intern

ational Competition

0.0%

20.0%

40.0%

60.0%

80.0%

Percent Ranking in Top 5 Percent Ranking in Top 3 Percent Ranking #1

Top 5 Factors Positively Affecting PerformanceRank 2012 2013

1 A Strong State Economy Domestic Sales Increase

2 Domestic Sales Increase A Strong State Economy

3 Lower Operating Costs Lower Operating Costs

4 Technology Changes Technology Changes

5 Political Stability Political Stability

Top 5 Factors Negatively Affecting PerformanceRank 2012 2013

1 Higher Operating Costs Staffing Issues

2 Domestic Sales Shortfall Domestic Competition

3 Domestic Competition Higher Operating Costs

4 Other Domestic Sales Shortfall

5 Staffing Issues Other

Expectations of 2014 Performance

Better43%

Worse23%

No Change33%

National Economy

Better73%

Worse3%

No Change23%

Regional Economy

Better69%

Worse7%

No Change24%

Your Business

Factors Expected to Adversely Impact Business in Next 12 Months (average rank in parentheses)

0.0%20.0%40.0%60.0%80.0%

Percent Ranking in Top 5 Percent Ranking in Top 3 Percent Ranking #1

Oct-0

7

Feb-0

8

Jun-0

8

Oct-0

8

Feb-0

9

Jun-0

9

Oct-0

9

Feb-1

0

Jun-1

0

Oct-1

0

Feb-1

1

Jun-1

1

Oct-1

1

Feb-1

2

Jun-1

2

Oct-1

2

Feb-1

3

Jun-1

3

Oct-1

30

2

4

6

8

10

12

Fargo ND-MN MSANorth DakotaU.S.P

erc

en

t

Historical Unemployment Rate(source: ND Job Service)

Difficulty in Hiring Qualified Workers (average rank in parentheses)

0.0%

20.0%

40.0%

60.0%

80.0%

Percent Ranking in Top 5 Percent Ranking in Top 3 Percent Ranking #1

Presentation slides available at:

FMWFChamber.com

starionfinancial.com

ndsu.edu/mgmt_mrkt

Special thanks to NDSU Department of Management and Marketing for assistance with survey collection and analysis