LEAWOOD, KS – December 15, 2020 – The COVID-19 pandemic took a toll on Kansas City Metro in 2020, but many area executives retain an optimistic outlook for 2021 and beyond, according to results of the annual Business Statistics & Trends survey 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 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.
Now in its third year in Kansas City Metro, survey results this year showed 47% of respondents report their businesses performed better than expected, a 17-point increase from 30% in 2019. Another good-news point for Kansas City Metro businesses: a decrease in the percentage reporting performance below expectations. In fact, 29% of survey respondents reported that 2020 business performance did not meet expectations, which was down from 30% in 2019.
Business leaders attributed shortfalls overwhelmingly to the pandemic. At the same time, others credited investments in new talent and expanded product offerings for their success.
“I think the overall success in the results is surprising,” said Michael Sullivan, Managing Director of Berkadia Real Estate Services in Kansas City. “The media has painted a picture of doom and gloom across multiple industries and regions. And I think it was great to see the fact that businesses were successful through all of this and you didn't see drastic decreases in workforce or overall revenues. it's a testament to the hard work, flexibility, and nimbleness of a lot of the organizations in Kansas City and the country as a whole.”
“The interesting thing is that Kansas City typically doesn't see the dramatic ups or downs during economic cycles,” said Rob Barker, President – Kansas City Region for First Business Bank. “And I think that's again what we see in some of the information here. Overall, Kansas City continues to be in that middle ground and perform in a steady fashion. And I think the numbers reflect that optimism even with significant changes businesses navigated in 2020.”
Looking ahead for 2021, Sullivan believes many businesses are prepared for success in 2021. “A lot of the people I talk to on a day-to-day basis share a lot of those thoughts and, I think the survey results, at least in Kansas City, echo that same idea — that 2021 should be much stronger, and that we're going into it in a much more streamlined fashion with a lot of success on the horizon here.”
Sales & Profitability
A larger percentage of survey respondents reported a decrease in sales revenue this year (44%) than those who reported an increase (38%). By contrast, in 2019 54% saw increased sales revenue and 27% reported a decrease. Profitability reflected similar changes: 45% reported higher profits in 2020 (down from 54% in 2019) and 32% saw lower profits, up from 24% in 2019.
Hiring & Wages
In 2020, 44% of respondents reported an increase of employees at their businesses (unchanged from 2019), while 24% said they decreased employees (up from 8% in 2019). About half (52%) of business leaders reported wage increases at their businesses in 2020, while 14% reported decreased wages, up from 7% in 2019.
Expectations for 2021
Plowing through the pandemic, business leaders expect starkly improved performance in 2021, although 44% cite an inability to forecast with certainty as a major challenge next year. For 2021, an astounding 84% of respondents expect better overall business performance, and just 2% expect worse performance. A combined 87% anticipate increases or no changes in sales revenue; 89% also expect either an increase or no change in profitability next year. More than two-thirds (67%) 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
- 67% predict increased profitability in 2021
- 67% project increasing wages in 2021
- 64% report employees working remotely in 2020
- 58% report disrupted business travel affected their organization in 2020
- 56% plan to increase the number of employees in 2021
- 51% said their businesses were temporarily shutdown or running below capacity in 2020
- 47% expect the COVID-19 pandemic to disrupt their businesses through the end of 2021
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/ .