Summit business barometer notes drop in first quarter
High Country Business Review
On a scale of 1 to 5, 5 being the highest, the Summit County Business Barometer survey dropped to 3.29 for the first quarter of 2007.
The Summit County Chamber of Commerce began the survey to get a feel for the economic pulse of the local business community in January, 2006. The latest score is the lowest of the five surveys the chamber has given. The 2006 year-end reading was 3.49.
Because five surveys don’t provide enough data to draw concrete conclusions, the chamber is unsure why the number declined. Mark Nunn, a financial adviser at Edward Jones, a sponsor of the barometer, said consumer confidence figures have gone down nationwide. His best guess: Long-term interest rates have increased in the past two months while the housing market remains slow. In addition, the continuing high cost of gasoline has probably contributed to the problem, he said.
This year’s survey included new and better-defined business categories, and for the first time, all business owners and professionals could fill out the survey, as opposed to previous questionnaires, which were only available to Summit Chamber members. This was also the first time the Summit Daily News Web site hosted the survey.
This quarter, 59 people responded to the survey, a number Summit Chamber executive director Constance Jones would like to see increase. She keeps the survey brief to encourage more people to participate.
“The information to date has been useful to understand what’s going on in the community in business trends,” Jones said. “It helps in getting consumer confidence indexes from business owners as to what they see ahead and how we can address any negative impacts.”
The chamber has compared its data with the state and national levels, and Summit County measures, “pretty much on the bubble, where the national numbers are,” Nunn said, adding that they need more data to draw correlations.
The information also helps local businesses see how they measure up to others in their category. For example, if a retail store owner sees that the retail category recorded a score of 4.5, but he or she feels the business is at a 3, the owner can explore what the store might be missing in terms of advertising, products, management or other factors.
“It can give them an idea of how they stack up in competition,” Nunn said, “but we’re not there yet because we need more participants in each category.”
A year ago, the barometer showed that business activity held steady at 3.60. But the business outlook index, reflecting expectations for the upcoming 12 months, declined significantly, to a level of 3.83.
This compares with a prior quarter reading of 4.38 and marks a new low for this particular index as well.
Local inflation figures, as measured by this survey, continued to move higher. More than 69 percent of respondents indicated that they paid higher prices for their goods and services, with an average increase of 6.6 percent. About half said they passed on the cost to customers by raising prices by an average of 6.5 percent.
Every quarter, the survey features a new open question. This time, it asked about the percentage of sales derived from overseas visitors or markets. The vast majority, 82.8 percent, indicated less than 10 percent of their revenue came from this source. Roughly 10 percent of those surveyed indicated that they received between 11 percent and 20 percent of their business from overseas.
The second-quarter report may show an upswing, as some business have reported they are busier than in past years, Jones said. However, owners also are hearing from their second-home owner customers that kids are going back to school earlier in August, which would impact how long these spenders stay in Summit County. As a result, some business owners worry they may see a drop in business in August.