Despite persistent challenges stemming from COVID-19, business executives in the Greater Dane County area and around the state expressed optimism about what lies ahead in 2022, according to First Business Bank’s 19th annual survey of businesses.
Completed at the end of a year marked by steep pandemic-related recovery efforts, the Business Statistics & Trends Survey received responses from 305 business leaders in Greater Dane County, Southeast Wisconsin, Northeast Wisconsin, and Kansas City Metro.
Across all markets, 46% of survey respondents reported better-than-projected results in 2021, and 20% said their businesses performed worse than projected.
In Dane County, 46% of companies reported that their overall business performance exceeded expectations in 2021 (compared to 33% the previous year), and just 17% fell short of expectations — a sharp decline from 47% in 2020. Worse-than-expected performance was attributed primarily to the pandemic, followed by a talent shortage, higher operating costs, and a supply shortage.
Performance exceeding expectations was primarily attributed to improved internal efficiencies, followed by PPP loans and increased sales and marketing efforts, with investments in new talent and higher prices tied in fourth place.
“Businesses have shown great resilience in the face of extreme challenges,” said Jim Hartlieb, president of First Business Bank. “In particular, the talent hunt and associated labor costs have put pressures on businesses in Greater Dane County — and their profits — as reflected in the results of the First Business Bank survey. Finding both short-term and long-term solutions to mitigating these issues will be especially important in the year to come.”
Sales & Profitability
After three consecutive years of declining sales revenue, Dane County executives reported a sharp year-over-year increase this year from 32% to 63% — the best figures since 2018. The number of companies reporting a decline in sales revenue also dropped precipitously from 56% to 24%. This trend continued with profitability, as the number of companies whose profits increased shot up to 51% versus the 28% of those whose profits slumped (changes of 21 and 20 points, respectively).
Hiring & Wages
In terms of employment, a talent shortage was the top issue affecting business leaders in Greater Dane County in 2021, followed by employees working remotely (the only carryover from 2020) and a supply shortage. Despite these challenges, 42% increased their workforce and 74% increased wages, a significant jump from last year. Conversely, only 20% of respondents in Dane County saw a decrease in the number of employees and just 5% reported a decrease in wages.
Expectations for 2022
Increasing the number of employees in their businesses is the top priority for 2022, followed by client base diversification and cross-training employees. Finding new talent is expected to be the greatest challenge in 2022, followed closely by the continued impact of the pandemic. Looking ahead in 2022, 67% expect better overall business performance, 25% expect to perform the same as this year, while only 8% expect to do worse, reflecting a greater optimism in the Dane County business climate than was reported last year.
Other notable statistics include:
- 63% of survey respondents anticipate hiring more, and 77% project wage increases in 2022
- 75% expect higher sales in the year to come
- Just over half of respondents project higher profits in 2022