BROOKFIELD, WI – December 15, 2020 – The COVID-19 pandemic took a toll on Southeast Wisconsin businesses in 2020, but many area executives retain an optimistic outlook for 2021 and beyond, according to results of the annual survey of businesses conducted by First Business Bank.
Completed just before the U.S. Presidential election and news of a promising vaccine, the 2021 Business Statistics & Trends Survey received responses from 300 business leaders in Greater Dane County, Southeast Wisconsin, Northeast Wisconsin, and Kansas City Metro. Across all markets, 36% of survey respondents reported better-than-projected results in 2020, 21% reported as-expected results, and 43% said their businesses performed worse than projected.
In its 12th year in Southeast Wisconsin, this year’s survey results showed more businesses exceeding overall performance (35%) than in 2019 (31%). However, more also fell short of expectations – 43% compared to 31% in 2019. Business leaders attributed shortfalls overwhelmingly to the pandemic. Those who reported exceeding expectations cited improved internal efficiencies and increased sales and marketing efforts as their top two initiatives.
“Even with a fair amount of uncertainty, it’s impressive to me that so many feel optimistic,” said Kevin Kane, President of First Business Bank’s Southeast Wisconsin Region. “Despite all the challenges, a lot of people are pressing on and hoping that next year is better.”
“We still have the best economy in the world,” said Kent Lorenz, manufacturing automation consultant and First Business Financial Services, Inc., board member. “The assumption is the vaccine will work, the businesses will recover. Where else are you going to put your money? That bodes really well for us. The survey results were optimistic, but I’m personally more bullish about where the economy will go in the next few years. The fields will be rich for investment.
Sales & Profitability
Almost an equal percentage of respondents experienced an increase in sales revenue (41%) compared to those who reported a decrease in sales in 2020 – 44%. By contrast, in 2019, 59% saw increased sales revenue and 21% reported a decrease. Profitability reflected similar changes: 44% reported higher profits in 2020 (down from 54% in 2019) and 35% saw lower profits, up from 17% in 2019.
Hiring & Wages
In 2020, most respondents reported no change in their number of employees (55%), while 26% said they increased employees, and 19% reported a decrease. The percentage of business leaders reporting wage increases at their businesses dropped from 77% in 2019 to 41% in 2020. Only 8% report decreased wages, up from 2% in 2019.
Expectations for 2021
Plowing through the pandemic, business leaders expect starkly improved performance in 2021, although the majority (61%) cite an inability to forecast with certainty as a major challenge next year. For 2021, 75% of respondents expect better overall business performance, and just 6% expect worse performance. A combined 92% anticipate increases or no changes in sales revenue; 92% also expect either an increase or no change in profitability next year. Almost two-thirds (63%) forecast higher wages at their businesses in 2021.
A summary of the results and reaction from local business leaders is available through the First Business Bank Podcast. Other statistics include:
- 71% forecast increased sales revenue in 2021
- 68% project increased profitability in 2021
- 67% expect the COVID-19 pandemic to disrupt their businesses through the end of 2021
- 63% project increasing wages in 2021
- 52% report employees working remotely in 2020
- 52% plan to maintain the same number of employees in 2021
- 41% report disrupted business travel affected their organization in 2020
- 40% said their businesses were temporarily shutdown or running below capacity in 2020
Download the full 2021 First Business Bank survey report.
About First Business
First Business Financial Services, Inc. (Nasdaq: FBIZ) is a Wisconsin-based bank holding company focused on the unique needs of businesses, business executives, and high net worth individuals. First Business offers business banking, specialty finance, and private wealth management solutions, and because of its niche focus, provides clients with unmatched expertise, accessibility, and responsiveness. Member FDIC, First Business’ corporate headquarters are at 401 Charmany Drive in Madison, WI. For additional information, visit www.firstbusiness.com or call 608-238-8008. The First Business logo is available at http://www.firstbusiness.com/logo/ .