A majority of D.C.-area business leaders expect the regional economy and their companies to expand in the coming months, though many still struggle with financing issues, according to a new survey.
The December Business Outlook survey of 200 area executives, produced for the Greater Washington Board of Trade by D.C.-based Clarus Research Group, reveals that most businesses still struggle with bank financing and credit. The need for financing continues to hold many companies back from expansion, said Ron Faucheux, Clarus Research president.
“Until you put some money back into the economy and create jobs, you’re not going to fix the economy,” John Kane, president and chief executive officer of Office Movers Inc., said Monday during a roundtable discussion of the survey results.
But beyond the immediate future, the survey indicates, many executives expect a turnaround.
“Business people continue to be much more positive about tomorrow than today, though they’re increasingly positive about today as well,” Faucheux said.
Sixty percent of respondents said their business would strengthen in the next year, 29 percent said it would stay the same and 9 percent said it would weaken, according to the survey. Fifty-nine percent expect economic conditions in the Greater Washington area to improve. And 32 percent expect to hire new employees in the next six months, 20 points higher than those companies planning layoffs.
The numbers are an improvement over similar surveys conducted in June and February, yet business and government leaders remain guarded.
Maryland Comptroller Peter Franchot, for example, said his state’s philosophy was “unbridled caution.” D.C. Chief Financial Officer Natwar Gandhi warned of “major problems” in the commercial real estate market. Both jurisdictions face billion-dollar-plus shortfalls in the coming years.
Wayne Hunley, PNC Bank’s corporate banking regional executive, said his company was “out there looking” for deals, but it was very difficult in the current economy to structure a real estate loan that works for everyone. Bank of America, meanwhile, is still thinking its way through a lending strategy for the next year, said William Couper, president of the bank’s mid-Atlantic region.
Survey findings
» 47 percent said current economic conditions in the D.C. area were “mostly good,” and 40 percent said “mostly bad.”
» 25 percent said business overall had improved since last year, 40 percent said declined and 34 percent said it had stayed the same.
» 60 percent said business would strengthen in the next year, 29 percent said stay the same and 9 percent said soften.
