The Tatum Survey of Business Conditions May 2013
Highlights as of May 1, 2013
Results:
- The Tatum Index dipped slightly as the six-month upward improvement in business conditions waned, and there are concerns regarding the 60-day outlook.
- With the exception of business conditions in the past 30 days, all indicators are down due to uncertainty in the economic outlook.
- Technology and healthcare businesses registered the most positive results over the last month, while financial businesses were the weakest.
- Large and mid-market companies showed the best results, while smaller companies were on the downside. This may be due to the effects of sequestration and small-business concerns regarding new healthcare regulations.
Conclusion:
Business conditions are beginning to show weakness, especially in the outlook. A pattern of a mid- year slump has been evident in the past three years, which has been a repeated pattern in the Survey.
Tatum Index of Business Conditions
The Tatum Index of Business Conditions is a simple average of the ratio of our respondents who are reporting improvement versus those reporting a worsening in business conditions for the past 30 days and the next 60 days.
As of May 1, the Tatum Index registered a two-month steep decline following March’s steep rise. This decline was influenced greatly by the 60-day outlook, which has caused a downward inflection of the three-month moving average not seen since October 2012.
Order Backlogs
The percentage of respondents reporting an improvement in orders on hand declined to 34% from 41%. Those reporting worsened backlogs declined to 13% from 16%.
Capital Expenditure Commitments
The percentage of respondents reporting higher commitments to capital expenditures declined slightly to 30% from 31%. The percentage committing less to capital equipment also rose, moving to 21% from 15%.
Employment
The percentage of respondents hiring more workers decreased to 18% from 24% a month ago. Those indicating they hired less rose to 12% from 9%.
Capital Availability and Pricing
The percentage of respondents indicating improved financing conditions fell to 26% from 34%. Those indicating worsening conditions decreased to 4% from 7% last month.
We hope you found Tatum's Commentary interesting and useful. We welcome your comments and questions. Click the link below to view the complete report: May 2013 Tatum Survey of Business Conditions
Sam Norwood
Senior Partner
www.TatumLLC.com
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