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Policy Uncertainty Shakes Business Confidence in Region

(WASHINGTON) ----- Eighty-four percent of business executives in the Greater Washington region say uncertainty in government policy is an obstacle to making business decisions, according to a new survey sponsored by the Greater Washington Board of Trade. The survey also shows that business confidence in the region, measured by the annual Business Outlook Index, has fallen 8 points over the past year.

“The uncertainty has pushed businesses from multi-year or annual forecasting to quarter-by-quarter planning,” said Jim Dinegar, President and CEO of the Greater Washington Board of Trade. “Companies are in a holding pattern and the uncertainty is making it unnecessarily difficult to make the appropriate business decisions.”

Results from the Business Outlook survey:

• 84% of the region’s business owners and executives see the lack of certainty in government policy as an obstacle in making business decisions for their company or organization. Only 12% believe the lack of certainty is no obstacle at all. A majority of respondents––52%––say lack of certainty is a “big” obstacle.

• 81% of business owners and executives believe the specific possibility of federal budget sequestration is an obstacle to making business decisions.

• The region’s overall Business Outlook, which is based on the survey's findings, index slipped from 81 to 73 over the past 14 months. The Current Conditions Index went down 4 points and the Future Expectations Index fell by 10 points. This is the steepest drop in the Business Outlook Index since the survey series started in 2009.

• Despite uncertainties and concerns about the future, 68% of the business executives interviewed in the survey said conditions in the Greater Washington area are mostly good while 20% said mostly bad. That is about the same as last year’s survey.
  
• 38% of business owners and executives surveyed said their business’s overall financial situation has improved over the past one year––that’s down from 44% in the prior survey.
• Looking ahead six months, 32% of business executives surveyed believe that conditions will improve––that represents a slight increase from the prior survey, then 30% expected improvement.

• 28% expect that their businesses will add jobs––a 7% decrease from the survey. While 10% expect to decrease the number of its employees––a 6% increase from the last survey; 59% expect no change.

• 46% expect their revenues and total sales to increase over the next year, while 11% expect them to decline. Again, this represents a less encouraging picture than we saw in the last survey when the numbers were 57% and 7%.

• Local business executives continue to rate current economic conditions in the Greater Washington Region much better than they rate national conditions; 42% rate national conditions as good while 68% rate the region’s conditions as good––a 26–point difference.

The survey was conducted Nov. 14-20 by Clarus Research Group, a nonpartisan survey research firm based in Washington, D.C.; 203 business owners and top executives in the region were interviewed by live telephone specialists. The Greater Washington Board of Trade’s Business Outlook 2012 Survey indicates business leaders’ optimism on the state of the local economy as they plan for the new year. Business leaders express their optimism through perceptions about the economy and their plans to hire, expectations for revenue and intentions to spend. The Board of Trade will conduct another survey in the first quarter of 2013 to determine how the fiscal cliff and sequestration negotiations have influenced businesses throughout the region.


Click here to view all Business Outlook Survey results.


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Greater Washington Board of Trade
The Greater Washington Board of Trade is the premier regional 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. The Board of Trade addresses business concerns that stretch across the District of Columbia, Suburban Maryland, and Northern Virginia, with a priority focus on transportation, emergency preparedness, green as a competitive advantage, and workforce issues. Pro-business and bipartisan, the Board of Trade develops positions on issues with the basic premise that sound, reasonable policies will benefit the economy and the community at large.  To learn more about the Greater Washington Board of Trade and its commitment to improving the region’s business community, visit www.boardoftrade.org and www.greaterwashington.org.