The Tatum Survey of Business Conditions November 2012

Sam Norwood

Summary as of November 1, 2012
As of November 1st, overall responses indicate that we reached the bottom of this year’s downward trend two months ago. The past 30 days and the 60-day outlook are best summarized as “steady” with a very slightly positive bias.

In this month’s Survey, the Pacific region reflects the most negative reports. When we combine this with the very weak conditions in international business, we suggest that declining Asian economies are having quite a noticeable effect on Pacific coast businesses.

Capital expenditure commitments have been stronger than would be normally expected, given the circumstances. We think that tax considerations are playing a significant role in decisions to spend this year rather than 2013.

Employment plans among our respondents remain subdued despite recent modest improvements. We believe this reflects political and tax uncertainties as well as international economic concerns.

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 November 1st, the Tatum Index of Business Conditions turned modestly positive for the second consecutive month. Both the past 30-day retrospective and the 60-day outlook contributed to the uptick. The rise this month is due to proportionately greater declines in “worsening” trends than the declines in “improving” trends.

Order Backlogs
The percentage of respondents reporting an improvement in orders on hand dropped sharply to 17% from 29%. The percentage reporting worsened backlogs nudged down again to 20% from 23%.

Capital Expenditure Commitments
The percentage of respondents reporting higher commitments to capital expenditures rose to 28% from 21%. The percentage committing less to capital equipment declined to 19% from 24%.

The percentage of respondents hiring more workers edged up to 29% from 28% a month ago. The percentage indicating they did less hiring also crept up, to 17% from 16%.

Capital Availability and Pricing
The percentage of respondents indicating an improvement in financing conditions declined to 13% from 16%. Also, the percentage indicating conditions were worsening rose, to 10% from 8% last month. Both are unfavorable.

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: November 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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