The Tatum Survey of Business Conditions July 2012

Sam Norwood

Summary as of July 1, 2012

The news is more bad than good as our Tatum Survey respondents report on conditions as of July 1. While there was a slight uptick in those reporting better conditions in the last 30 days, for the most part our respondents are not optimistic. As they look out towards the next 60 days, the majority are taking a “wait and see” attitude. They are increasing their cap ex spending a little, but keeping a tight lid on hiring.

Backlogs presented a conflicting story, with some reporting an improvement and expectations of continuing improvement, while others saw declines and expect more declines.

The general takeaway is that the economy is bumping along in a weakened state without a strong catalyst for change.

Tatum Index of Business Conditions

The Tatum Index of Business Conditions is a simple average of the ratio of our respondents who are reporting improvement versus those reporting a worsening in business conditions for the past 30 days and the next 60 days.

As of July 1st, the Tatum Index of Business Conditions continued its decline. The 3-month moving average of the Index also declined.

Order Backlogs

The percentage of respondents who reported an improvement in orders on hand jumped to 40% from 26% a month ago. The percentage reporting worsened backlogs also jumped, to 22% from 16%, last month.

Capital Expenditure Commitments

The percentage of respondents reporting higher commitments to capital expenditures increased to meaningfully 26% from 18% a month ago. The percentage that committed less on capital equipment increased to 18% from 15%.


The percentage of respondents hiring more workers rose slightly to 18% from 17% last month. The percentage that indicated they did less hiring jumped to 15% from 9%.

Capital Availability and Pricing

The percentage of respondents indicating an improvement in financing conditions stayed flat at 21%. However, the percentage who indicated conditions were worsening rose materially to 17% from 10% last month.

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: July 2012 Tatum Survey of Business Conditions

Sam Norwood 
Senior Partner 

Copyright 2012 Tatum, LLC All Rights Reserved.

Any use or reproduction of the contents of this report without the written consent of Tatum, LLC is strictly prohibited. The authors are not engaged in rendering legal, investment or other professional services by publication of this report. Information contained in this report should not be used as a substitute for professional advice, legal, investment or otherwise, on any particular issue. 

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