BIG TICKET: More companies were ready to make large equipment purchases in the 2011
survey than any of the previous three years.
ECONOMIC OUTLOOK: The weak economy remained the biggest hindrance to business, with taxes and health care costs coming in second.
ROSY OUTLOOK: The businesses that responded to PBN's 2011 winter survey were more optimistic than at any point since the
survey began in 2008. More said that business activity outpaced the previous quarter and that they planned to hire.
GETTING BETTER? Less than one-quarter of businesses responding to the survey said they expected business to be worse one year from now.
GLASS HALF FULL: Roughly half of the businesses that responded to the survey expect Rhode Island's economy to improve in the next 12 months.
TALE OF THE TAPE: The cost of doing business and associated red tape in Rhode Island remain among the biggest hindrances to companies based here, according to survey respondents.
A lost year: that’s how many Rhode Island business owners describe 2011, its false starts, scorched-earth politics, consumer malaise and morbid fascination with a double dip. Anticipating recovery, many Ocean State industries instead had the rug pulled out from under them in 2011 and ended up losing ground rather than making it up.
Consumer spending languished until a holiday-shopping rally, while unemployment remained stubborn. Capital investments were soft, and the real estate market continued to sink under the weight of a steady supply of foreclosures. A tsunami in Japan, a financial crisis in Europe, a winter of endless snow removal and Tropical Storm Irene’s blackout contributed additional drag on markets that never seemed to get off the ground.
Yet through it all – the joblessness, underwater mortgages and the euro – many local businesspeople are marching into 2012 with a brighter outlook than they were a year ago, the last time optimism about a recovery was on the rise.
Maybe it’s due to the successful efforts to enact state-worker pension reform, but responses to Providence Business News’ winter 2011 survey show Ocean State business owners more confident about the economy after enduring a disappointing year than they were when it started.
Roughly two-thirds of the 126 respondents to the survey – which was sent to 1,148 businesses in Rhode Island and Bristol County, Mass. – described the outlook for their business a year from now as “better than this year,” up 5 percentage points from last summer’s survey and much improved from a bleak 39 percent in December 2008.
And more than half, 54 percent, described their business activity as “better than last quarter,” compared with 44 percent last December and 32 percent in December 2008.
“Most of the respondents are doing better then they were doing last quarter, which is a sign that the Rhode Island economy is improving slowly,” said Edward M. Mazze, distinguished professor of business administration at the University of Rhode Island, who assists PBN in drafting the semi-annual survey. “You are seeing better results, they are more optimistic, but the same problems that they have had to deal with in the past exist today. I also think that an awful lot of what you are seeing is survival of the fittest.”
In what may be more exciting to Rhode Islanders than the overall business outlook, 43 percent of respondents said they planned to hire new workers in the next quarter. Although still below half, that’s the highest percentage to say they expect to take on new workers since the survey started in the summer of 2008 and a significant improvement over last December, when the figure stood at 29 percent.
Along the same lines, only 2.5 percent of business owners said they were planning work force reductions, compared with 8 percent over the summer and last winter.
That cautious optimism is evident at local businesses like Brewster Thornton Group Architects in Providence, which suffered through a disappointing 2011 but anticipates a brighter 2012.
PBN is now accepting applications for its newest award program and event for RI & Bristol County to celebrate the Manufacturing Renaissance that is evolving regionally and across the country. The deadline for applications is March 20th.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.