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Survey captures sunny outlook

Executives at small- and medium-sized firms expect growth and profits ahead, with confidence rising since Hurricane Katrina.

By JAMES THORNER
Published March 7, 2006


The nation's small- and medium-sized firms appear to have recovered their confidence after being mugged last year by $3-dollar-per-gallon gasoline and hyperactive hurricanes.

In a survey of 2,114 chief executives conducted Feb. 20-28, about two-thirds expected to boost profits and hiring this year. Close to 90 percent said the economy has "improved" or "remained the same" compared with a year ago.

In fact, the biggest concern flagged in the poll was finding enough qualified employees to keep the good times rolling. (Rising interest rates and fuel prices were the biggest blots on the landscape in last year's surveys.)

San Diego-based TEC International surveys executives each quarter, noting that modest-sized firms create 75 percent of all jobs.

In Florida, the 149 executives who answered the survey responded much the same as their counterparts across the country:

--About 84 percent of Florida execs who responded expect sales to increase in the next 12 months, with 72 percent predicting increased profitability.

--In good news for employment, the top priority for Florida companies, cited by 36 percent of executives, is growth. Sixty-four percent of business leaders expect to hire this year.

--Higher prices could cover higher energy costs, a strategy favored by 32 percent of executives. Fifty-five percent of executives said workers would have to cover all or part of higher health costs.

--On a question of how an "Avian flu pandemic" would harm business, 28 percent answered "significant negative impact" and 42 percent answered "minor negative impact."

The last question was a relatively new one, part of TEC's attempt to gauge potential threats to prosperity.

"In the past it's been the tsunami, hurricanes or 9/11. Every year it seems like there's been a major disaster," said Doug Linder, a TEC member as president of the YMCA of Greater St. Petersburg.

The YMCA, an unusual nonprofit among for-profit members, had a banner year in 2005. It qualifies for TEC membership with its 300 employees and $7.5-million budget.

"Obviously we were very concerned with Hurricane Katrina," Linder said. "But for the first time in several years, we made our fundraising goal."

TEC, with 758 members in Florida, trains and supports chief executives. The national survey had a margin of error of 2 percentage points, the Florida survey 7 percentage points.

TEC collects the data for a "confidence index" that has trended upward since numbers hit bottom after Katrina. The index stands at 104.2, up five points from the last quarter of 2005.

As TEC said in a press release Monday: "Negative economic expectations have all but disappeared."

--James Thorner can be reached at thorner@sptimes.com or 813 226-3313.

[Last modified March 7, 2006, 01:14:20]


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