BROOKFIELD, WI – December 8, 2021 – This summer’s COVID-19 resurgence made business recovery efforts more difficult, but in the face of these challenges, business executives around the state — as well as the Southeast Wisconsin — expressed optimism about the future, according to First Business Bank’s annual survey of business decision-makers.
The Business Statistics & Trends Survey, concluded at the end of a year marked by continued efforts to return to normal, reflects the perspectives of 305 business leaders in Southeast Wisconsin, Northeast Wisconsin, Greater Dane County, and Kansas City Metro.
Across all markets, 46% of survey respondents reported better-than-projected results in 2021. Conversely, 20% said their businesses performed worse than projected.
Talent and supply shortages are far and away the two most pressing issues that business leaders in Southeast Wisconsin had to deal with in 2021. Port Milwaukee, in particular, experienced logjams similar to several ports on the east and west coasts. Companies generally were able to overcome those obstacles, however, as the percentage of companies exceeding overall business performance expectations increased from 35% to 41% over the previous year, while the percentage of those that fell short of expectations plummeted from 43% in 2020 to 26% in 2021.
A talent shortage is cited as the top reason for underperformance, followed closely by supply shortages, higher operating costs, and the pandemic. Better-than-expected performance was attributed to improved internal efficiencies, increased sales and marketing efforts, higher prices, and PPP loans.
“With a relatively low unemployment rate in Southeast Wisconsin, the labor market will likely remain tight for the foreseeable future,” said Kevin Kane, President of First Business Bank’s Southeast Wisconsin Market. “Finding new talent, higher inflation, and the ongoing impact of the pandemic will continue to test the resolve of business leaders in Southeast Wisconsin. However, this year’s survey shows that companies have proven incredibly resilient throughout the most difficult operating climate of this century. With cautious optimism, business leaders in Southeast Wisconsin can begin working their way back toward more normal operations.”
Sales & Profitability
Southeast Wisconsin experienced one of the most dramatic improvements in the region in terms of sales. The number of companies reporting lower sales revenues in 2021 plummeted 34 percentage points from the previous year to just 10%, while 78% reported a sales increase (up 37 points). Profitability also gained ground, as 53% saw increases and 21% of respondents reported a decrease in profits.
Hiring & Wages
Sixteen percent of respondents reported a decrease in their number of employees (a drop of 3 percentage points from last year), but 46% saw a workforce increase (a sharp 20-point increase from the previous year). None reported wage decreases (compared to 8% in 2020), and 81% saw wage increases (nearly double the previous year’s 41%).
Expectations for 2022
Increasing the workforce is by far the top strategy for improving the Southeast Wisconsin business climate in 2022, followed by diversifying the client base and creating processes for innovation. Almost three-quarters of respondents (72%) expect those strategies to lead to better overall business performance in 2022 (down 3 percentage points from the previous year), 20% expect to perform the same in 2022, and just 8% expect to do worse.
Other notable statistics include:
● 78% project a sales revenue increase in the coming year (10 points higher than the previous year’s projection).
● Projections for both profit increases and decreases dropped by under 5 points.
● Wages in 2022 are expected to almost exactly mirror wage projections respondents made in last year’s survey for this year — none project wage decreases and 80% expect increases in 2022.
Get your copy of First Business Bank’s full Business Statistics & Trends Report and watch the related video presentation prepared by Nancy Johnshoy, CFA, Senior Vice President - Portfolio Manager & Market Strategist.
About First Business Bank
First Business Bank specializes in Business Banking, including Commercial Banking and Specialty Finance, Private Wealth, and Bank Consulting services, and through its refined focus delivers unmatched expertise, accessibility, and responsiveness. Specialty Finance solutions are delivered through First Business Bank’s wholly owned subsidiary First Business Specialty Finance, LLC. First Business Bank is a wholly owned subsidiary of First Business Financial Services, Inc. (Nasdaq: FBIZ). For additional information, visit firstbusiness.bank. Member FDIC