The Tatum Survey of Business Conditions February 2013
Summary as of February 1, 2013
As of February 1st, overall conditions improved as the outlook continued to brighten. While employment was weak and financing conditions were challenging in the past 30 days, the remaining indicators were flat-to-improving, and the 60-day outlook continued to improve strongly.
Regionally, the Northeast registered the strongest positive change from the prior month as recovery from Hurricane Sandy gained momentum. The Southwest, which was least affected by the Great Recession, was one of the two weakest regions, along with the Southeast, for the second consecutive month.
We observe that equity markets have also become more positive in the past month, apparently anticipating improving business performance, consistent with our Survey’s view of better business conditions.
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 February 1st, the Tatum Index of Business Conditions improved materially for the second consecutive month after what now appears to have been a temporary downward blip in December caused mainly by concerns over the “fiscal cliff.” Discounting December, the trend has been moving upward for four of the past five months, starting in October 2012, now reaching the highest level since last April.
Order Backlogs
The percentage of respondents reporting an improvement in orders on hand improved to 24% from 18%. The percentage reporting worsened backlogs stayed steady at 18%.
Capital Expenditure Commitments
The percentage of respondents reporting higher commitments to capital expenditures declined to 16% from 29%. The percentage committing less to capital equipment also declined, moving to 16% from 24%.
Employment
The percentage of respondents hiring more workers declined to 17% from 22% a month ago. The percentage indicating they did less hiring increased, to 13% from 10%.
Capital Availability and Pricing
The percentage of respondents indicating an improvement in financing conditions declined to 18% from 23%. The percentage indicating conditions were worsening increased to 11% from 9% 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: February 2013 Tatum Survey of Business Conditions
Sam Norwood
Senior Partner
www.TatumLLC.com
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