The Tatum Survey of Business Conditions October 2013
Highlights of the Month:
Results:
• The Tatum Index rose on the strength of an improving outlook for the next 60 days.
• Every one of our indicators regarding the next 60 days turned positive this month.
• We think that the Fed’s decision to extend its bond purchasing program has encouraged businesses to expect better financing conditions and to commit to pending capital expenditure programs. This is where financial policy connects with Main Street.
Conclusion:Business conditions in the third quarter were not as strong as in the second, but the fourth quarter now looks like business conditions are likely to improve.
Tatum Index of Business Conditions
The Tatum Index of Business Conditions is a simple average of the ratio of our respondents for the past 30 days and the next 60 days.
As of October 1, the Tatum Index moved up to 3.8 from 3.1 a month ago, reflecting a stronger trend in business conditions as we enter the fourth quarter.
Order Backlogs
The percentage of respondents who indicated improving orders on hand rose to 45% from 42%. Those reporting worsened backlogs declined to 12% from 13%.
Capital Expenditure Commitments
The percentage of respondents reporting higher commitments to capital expenditures slid slightly to 31% from 33%. However, the percentage committing less to capital equipment also declined modestly, moving to 18% from 21%.
Employment
The percentage of respondents hiring more workers declined to 16% from 26% a month ago. However, those indicating they did less hiring declined to 16% from 17%.
Capital Availability and Pricing
The percentage of respondents indicating improved financing conditions rose slightly to 18% from 17%. Those indicating worsening conditions declined slightly to 19% from 20% 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: October 2013 Tatum Survey of Business Conditions
Sam Norwood
Senior Partner
www.TatumLLC.com
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