The Tatum Survey of Business Conditions August 2011
Summary as of August 1, 2011
After correctly predicting the recently-announced anemic 2nd quarter GDP growth of 1.3%, the Tatum Survey as of August 1 has taken an ever-so-slight upturn when reporting on the immediate past and predicting the future. As our respondents report on the past 30 days the majority still state that conditions stayed the same although at the margins those experiencing improvements are up slightly.
After correctly predicting the recently-announced anemic 2nd quarter GDP growth of 1.3%, the Tatum Survey as of August 1 has taken an ever-so-slight upturn when reporting on the immediate past and predicting the future. As our respondents report on the past 30 days the majority still state that conditions stayed the same although at the margins those experiencing improvements are up slightly.
After correctly predicting the recently-announced anemic 2nd quarter GDP growth of 1.3%, the Tatum Survey as of August 1 has taken an ever-so-slight upturn when reporting on the immediate past and predicting the future. As our respondents report on the past 30 days the majority still state that conditions stayed the same although at the margins those experiencing improvements are up slightly.
After correctly predicting the recently-announced anemic 2nd quarter GDP growth of 1.3%, the Tatum Survey as of August 1 has taken an ever-so-slight upturn when reporting on the immediate past and predicting the future. As our respondents report on the past 30 days the majority still state that conditions stayed the same although at the margins those experiencing improvements are up slightly.
Index of Business Conditions
Tatum’s Index of Business Conditions is a simple average of the ratio of our respondents who are reporting improvement versus those who are reporting a worsening in business conditions for the past 30 days and the next 60 days.
As of August 1st, the Tatum Index of Business Conditions improved slightly to approximately 3.0 from 2.7 a month ago, with slight upturns in reports of recent past activity as well as future outlook. After 5 months of consecutive declines, this would seem to be a positive outcome. However, in a range of 3.0 to 4.0 we have a very high correlation with near zero economic growth. Below 3.0 suggests recession in the Tatum Index, and the Index was in this range throughout the 2008-2009 recession. Since the end of the recession nearly 2 years ago, the Index has been at or above 3.0, except for the months of September 2010 and July 2011. To view the Tatum Index of Business Conditions, please click on
{Index of Business Conditions}
Order Backlogs
The percentage of respondents who reported an improvement in backlogs rose slightly to 27% from 25% a month ago. The change came from a decline in those reporting that backlog stayed the same. The percentage reporting lower backlogs was unchanged from last month at 17%.
{Order Backlogs}
Capital Expenditure Commitments
The percentage of respondents committing more on capital equipment decreased to 19% from 24%. The percentage that committed less on capital equipment increased slightly to 21% from 20%.
{Capital Expenditure Commitments}
Employment
The percentage of respondents hiring more workers increased slightly to 21% from 20%. The percentage that indicated they did less hiring also increased to 13% from 11% in the prior month.
{More about Employment}
Capital Availability and Pricing
The percentage of respondents indicating an improvement in financing conditions declined slightly to 16% from 17%. The percentage who indicated conditions were worsening rose significantly to 16% from 7%.
{More about Capital Availability and Pricing}
We hope you found Tatum's Commentary interesting and useful. We welcome your comments and questions. Click the link below to view the complete report:
August 2011 Tatum Survey of Business Conditions
Sam Norwood, Senior Partner
Glenn Passin, Partner
www.TatumLLC.com
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