Spring Economic Outlook Survey of Business Executives

WASHINGTON, DC — May 4, 2010 – Confidence in the Greater Washington, DC
economy reached its highest point since February 2009, according to the semi-annual
economic survey released today by the Greater Washington Board of Trade. Business
leaders have overall positive perceptions of current economic conditions that confirmed
the outlook six months prior. They also expect the economy to keep improving, as
measured by the survey’s Business Outlook Index.

“This is the highest level of economic confidence in Greater Washington’s business
community since the beginning of the economic downturn” said Jim Dinegar, president
and CEO of the Greater Washington Board of Trade. “Corporate executives and
government officials should take special note of the significant spike in the number of
business leaders who are positive about the state of the current economy.”

HIGHLIGHTS

• CURRENT CONDITIONS: Sixty-eight percent of regional business executives surveyed said current business and economic conditions in the region are “mostly good” while 16 percent said “mostly bad.” This is a 21-percentage point jump toward the positive since December 2009 and a 40 point leap since
  February 2009.
  
  Forty-nine percent of business executives say their company’s overall financial
  situation has improved over the past year, while 30 percent say it has stayed the
  same. Twenty percent say it has declined.
  
  “Those with an improved financial situation increased by a sizable 29 percentage
  points, while those reporting a deteriorating situation continued to get smaller,”
  said Ron Faucheux, president of Clarus Research Group.
   
• BUSINESS STRENGTH: Nearly three-fourths of Greater Washington’s business executives expect their businesses to strengthen over the next year, up 14 percentage points since December 2009.
   
• REVENUES AND SALES: An increase in revenue and/or sales is expected by
  73 percent of survey respondents. In December 2009, an increase was
  expected by 55 percent. Today only seven percent anticipate a decrease and 20
  percent think revenue and/or sales will stay the same.
   
• JOBS: Thirty-eight percent of those surveyed expect their businesses to
  increase employees in the next six months and seven percent expect their
  businesses to decrease employees.
   
• NEW BUSINESS INVESTMENTS: Plans to purchase new equipment are up by
  15 percentage points since December 2009. Plans for expanding products or
  services are up by nine points, upgrading computer technology by nine points
  and making facilities “greener” by five points.
   
• GOOD PLACE TO DO BUSINESS: The region’s business executives continue
  to say that doing business in Greater Washington is easier than in most other
  places in the United States. Today 66 percent say that it is easier to do business
  in the region, while 17 percent say it is harder.
   
• CONFIDENCE IN METRO: The majority of business leaders – 58 percent of
  those surveyed – say that they are worried about the safety of the region’s Metro
  system. Thirty-four percent say they are “very worried” and 37 percent say they
  are “a little worried.” At the same time, most business leaders think the Metro will
  continue being an asset to the local economy. Sixty-three percent say Metro will
  be more of an asset to the local economy over the next year, while only 16
  percent say less and 18 percent say it will remain the same.
   
• STATE AND LOCAL BUDGET DEFICITS: Seventy-seven percent of business
  executives are worried about state and local government budget deficits hurting
  the region’s economic competitiveness and quality of life – 34 percent are “very
  worried” and 43 percent are “a little worried.” Twenty-three percent are “not
  worried at all.”
   

The survey was conducted for the Board of Trade by Clarus Research Group, a
nonpartisan Washington-based research firm, and was sponsored by Tatum, a leading
professional services company supporting the office of the CFO.

The sample included 200 top business executives across the Greater Washington
region. Interviewing for the survey was conducted by live telephone interviewers from
April 19-26, 2010.

About the Business Outlook Index

The regional Business Outlook Index measures the level of overall confidence in and
expectations for the future of the economy by a representative sample of top business
executives in the Greater Washington, DC region.

                                                              December 2009    April 2010    Increase
Current Conditions Index                                       46               76             30
Future Expectations Index                                    83                91              8
Business Outlook Index                                        65               83             18

The component of the Business Outlook Index measuring business executives’
confidence in current economic conditions increased the most. Today the index is 76
points, up 30 points from December 2009. Business executives continued to express
optimism in the future. The index measuring expectations over the next six months to a
year is 91, up nine points since December.

OTHER RESULTS

• BUSINESS FINANCING: Today, businesses are still having difficulty getting loans; however, nearly half – 47 percent – expect easier access to credit in the next six months.
  
  “The credit crunch is beginning to thaw with 21 percent of business executives
  reporting that business financing and credit has gotten easier to secure,
  compared to 14 percent in December 2009,” said Peter A.S. Pfeiffer, managing
  partner of Tatum's Mid-Atlantic practice, which sponsors the Greater Washington
  Business Surveys. “Still, the current business financing and credit situation is a
  drag on regional business and must keep improving to ensure positive economic
  momentum.”
   
• HEALTH CARE REFORM COSTS: Providing the health care coverage as
  mandated by recently-passed congressional legislation is expected to be more
  expensive by 65 percent of regional executives surveyed.
   

For complete results, visit: http://www.bot.org/media-center/publications/greaterwashington-
business-outlook-survey.aspx .

SURVEY QUESTIONS AND TOPLINE RESULTS:

1. Thinking about the nation as a whole…. On the basis of what you’ve seen, read, or
heard – would you say that current NATIONAL business and economic conditions in
the United States are mostly GOOD – OR – would you say they’re mostly BAD?

1. Mostly good...................................................................36%
2. Mostly bad.................................................................... 48
3. Neither mostly good nor mostly bad................................ 15
4. Don’t know/Not sure........................................................ 1

2. Now, moving to the local economy, would you say current business and economic
conditions in the Greater Washington DC region are mostly GOOD – OR – would
you say they’re mostly BAD?

1. Mostly good...................................................................68%
2. Mostly bad.................................................................... 16
3. Neither mostly good nor mostly bad................................ 15
4. Don’t know/Not sure........................................................ 1

3. Thinking ahead SIX MONTHS, do you think business and economic conditions in
the Greater Washington DC region will improve, will get worse OR will stay the
same?

1. Will improve................................................................... 66%
2. Will get worse.................................................................. 4
3. Will stay the same......................................................... 30
4. Don’t know/Not sure......................................................... 1

4. Looking ahead SIX MONTHS, do you expect that your company or organization
will increase the number of its employees working in the Greater Washington
region, will decrease the number of its employees, OR will keep the number of its
employees exactly the same?

1. Increase employees ........................................................ 38%
2. Decrease employees ........................................................ 7
3. Keep the number of employees the same.......................... 55
4. Don’t know ...................................................................... 1

As you know, the financial situation of businesses and other organizations can be
affected by a lot of factors, such as income, expenses, growth, profit, access to
financing, and market competition.

5. Thinking back to ONE YEAR ago ... would you say your business’s overall
financial situation has improved since then, has declined since then, or has
stayed the same?

1. Improved ........................................................................ 49%
2. Declined ........................................................................ 20
3. Stayed the same ............................................................ 30
4. Don’t know/Not sure......................................................... 1

6. Now, looking ahead ONE YEAR, do you expect that your business will
strengthen, will soften, or will stay the same?

1. Will strengthen ................................................................74%
2. Will soften........................................................................ 5
3. Will stay the same.......................................................... 20
4. Don’t know/Not sure.......................................................... 1

7. Also looking ahead ONE YEAR, do you expect that your company’s or
organization’s total revenues and/or total sales, will increase, will decrease or will
stay the same?

1. Increase ........................................................................ 73%
2. Decrease......................................................................... 7
3. Stay the same ............................................................... 20
4. Don’t know ...................................................................... 1

8. Regardless of your total revenues and/or sales, do you expect that the prices and
fees you charge your customers, clients or members will increase, will decrease,
or will stay the same over the next FEW MONTHS?

1. Increase ........................................................................ 20%
2. Decrease......................................................................... 4
3. Stay the same ............................................................... 75
4. No Answer ...................................................................... 2

9. Over the last six months, do you think that acquiring bank financing and credit for
businesses and organizations such as yours has gotten much easier, a little
easier, a little harder, or much harder?

1. Much easier................................................................... 3%
2. A little easier ............................................................... 18
3. A little harder ............................................................... 30
4. Much harder ................................................................ 14
5. The same/no change..................................................... 23
6. Do not know/won’t answer............................................. 13

10. Looking ahead ... Do you expect it will get much easier, a little easier, a little
harder, or much harder to get bank financing and credit over the NEXT SIX
MONTHS?"

1. Much easier.....................................................................3%
2. A little easier .................................................................44
3. A little harder ................................................................18
4. Much harder ...................................................................8
5. The same/no change......................................................20
6. Do not know/won’t answer................................................8

11. Thinking about new investments, purchases and initiatives, does your business
or organization plan on doing any of the following within the next FEW MONTHS:

                                                                Yes       No      Doesn’t Apply/ No Answer
1. Purchase new equipment                         57%     38%              5%
2. Upgrade computer technology                  56        42                 1
3. Take a risk on a new idea                        60        36                 4
4. Expand products or services                    55        43                 3
5. Expand or increase office space,
plant size, stores, or other facilities              18        80                 2
6. Increase spending on professional
services such as legal, accounting,
or other consulting fees                               17        80                 3
7. Outsource more functions by getting
consultants and vendors to take over
responsibilities now handled by in-house
employees                                                16         82                 2
8. Increase advertising and promotion          46         52                 2
9. Launch a new branding initiative              28         68                 4
10. Modernize offices, buildings or other
facilities to make them more “green”
and energy efficient                                    36        60                  4

12. Based on what you’ve experienced, seen, read, or heard, do you think it is
EASIER or HARDER to do business in the Greater Washington DC region than it
is in most other places in the United States?

1. Easier ............................................................................ 66%
2. Harder .............................................................................17
3. About the same............................................................... 15
4. Don’t know ........................................................... ........... 3

Now, moving to another issue….
13. Last year, Congress passed an $800 billion stimulus package that was designed
to improve the nation’s economy. Thinking about the effect the stimulus package
may be having on the economy of the greater Washington DC region…. do you
think it’s having a big positive impact, a small positive impact, a small negative
impact or a big negative impact?

1. Big positive impact .......................................................... 13%
2. Small positive impact ...................................................... 59
3. Small negative impact ....................................................... 5
4. Big negative impact........................................................... 2
5. No impact ...................................................................... 20
6. Don’t know/Not sure.......................................................... 2

14. As you may know, local and state governments in the Washington region are
having trouble balancing their budgets… how worried are you that budget deficits
may hurt the region’s economic competitiveness and quality of life in terms of
service cuts and tax increases – would you say you are very worried, a little
worried, or not worried at all?

1. Very worried .................................................................. 34%
2. A little worried................................................................. 43
3. Not worried at all ............................................................ 23
4. Don’t know/Not sure......................................................... 0

15. Are you very worried, a little worried… or… not worried at all about the safety of
the region’s Metrorail subway system?

1. Very worried .................................................................. 21%
2. A little worried................................................................. 37
3. Not worried at all ............................................................ 40
4. Don’t know/Not sure.......................................................... 2

16. As you may have read or heard, there have been many recent news stories
about the region’s Metrorail system that relate to traffic congestion, parking,
safety, speed, maintenance and funding…with all of this in mind… Would you
say you are more or less likely to ride the Metrorail system now than you were a
few years ago?

1. More likely ..................................................................... 20%
2. Less likely....................................................................... 28
3. Same/no change ............................................................. 51
4. Don’t know ....................................................................... 1

17. Over the next year, do you think the region’s Metrorail system is likely to become
MORE of an asset for the local economy or LESS of an asset for the local
economy than it is now?

1. More.............................................................................. 63%
2. Less .............................................................................. 16
3. Stay same ..................................................................... 18
4. Don’t know/Not sure.......................................................... 3

18. Thinking about the health care reform legislation recently passed by Congress…
Do you think it will make providing quality health care coverage for your
employees less expensive… or… more expensive?

1. Less expensive ............................................................. 14%
2. More expensive.............................................................. 65
3. Neither/won’t affect cost.................................................. 14
4. Don’t know/Not sure......................................................... 7

Survey Presented by Greater Washington Board of Trade
The Greater Washington Board of Trade is the Greater Washington region’s premier business network
and the only local business association representing all industry sectors. Founded in 1889, the Board of
Trade enjoys a long history of helping its members’ businesses grow by providing content-rich programs,
connecting business leaders and marketing Greater Washington’s economic opportunities. As Greater
Washington’s regional business organization, the Board of Trade addresses business concerns that
stretch across geographic boundaries, such as transportation, emergency preparedness, green as a
competitive advantage and workforce issues. For more information, visit www.BoardofTrade.org.

Survey Conducted by Clarus Research Group
Clarus Research Group is a full-service and nonpartisan survey research firm based in Washington, D.C.
Clarus provides a full range of polling and market research services to corporate, association, nonprofit
and public affairs clients. Clarus conducts public opinion surveys, focus groups, branding studies
and media research. Dr. Ron Faucheux, who also teaches at the Public Policy Institute at Georgetown
University, is president of Clarus. For more information, visit www.ClarusRG.com.

Survey Sponsored by Tatum
Companies turn to Tatum when critical business challenges arise because we immediately deliver
financial and technology operational expertise via solutions tailored to the Office of the CFO. We leverage
nearly 1,000 executives and consulting professionals nationwide to accelerate results and create more
value™. For more information, visit www.TatumLLC.com.