After witnessing a “greater degree of pessimistic or anxious media reports” of late, Kruggel Lawton’s Terry Bush admits, “I was looking ahead to compiling the 3rd quarter survey results with a bit of trepidation.” Those troublesome media reports which Terry had seen regarding the economy in recent weeks and months, worried him ahead of his firm’s Third Quarter CFO Survey.
Bush, who is a Director at Kruggel Lawton CPAs which has offices in St. Joseph, South Bend, Elkhart, Goshen and Knoxville, says, “Although it’s not as prevalent in Michigan’s Great Southwest, the ‘cooling off’ in the nearby recreational vehicle (RV) industry has been getting a good deal of attention in recent months, particularly in Elkhart County.”
He notes, however, “The fact that this indicator of our regional business climate – admittedly basic and limited to the for-profit sector like it is – moved in a positive direction for the second quarter in a row is an encouraging sign,” and adds, “We’re still hearing from clients taking advantage of growth opportunities; struggling to recruit talented employees in certain positions; and on track for a good year in 2019.”
The results boil down to a market in the region that is essentially holding steady according to Bush, based on the survey of chief financial officers from for profit companies in Southwest Michigan and Northwest Indiana.
The third quarter 2019 Michiana Benchmark Business Index (BBI), compiled by the certified public accounting and consulting firm of Kruggel Lawton CPAs, showed improvement for the second straight quarter after reaching its lowest level ever in the first quarter of 2019. The overall third quarter BBI was 54.78 out of a maximum possible score of 100, an increase of over three-percent from the second quarter.
Kruggel Lawton conducts the confidential survey of CFOs in for-profit companies in the South Bend/Elkhart region on a quarterly basis. The survey tracks changes in companies’ revenue, profitability, and employment levels compared to the same quarter of the prior year, along with CFOs’ perception of the business outlook for their companies. Participating CFOs’ input on those four metrics is combined into the overall Benchmark Business Index to provide a barometer of the Michiana-area business climate.
Noteworthy third quarter survey results include:
- The 3.34-percent increase in the overall BBI is not exceptional on its own. However, after an increase of over two-percent in the prior quarter, an increase in two consecutive quarters is worth noting.
- Of the four metrics, profitability increased significantly (11-percent) from the prior quarter, while all three of the other metrics experienced very little change.
- CFO outlook (or optimism) declined two-percent from the prior quarter, continuing a steady downward trend of nearly two years, in fact down 15-percent from late 2017. At the same time, CFO optimism consistently remains the highest-rated of the four survey metrics.
Bush says, “We seem to hear ever more concern and anxiety about the economy at the global/national level and here in the South Bend region,” but notes, “With a second consecutive quarterly increase in our overall survey index, we see an indication that for-profit companies in the region are generally holding steady. In fact, strong increases in the profitability metric since the first quarter of this year indicate that companies are earning healthier profits to re-invest in their business and people and address challenges and opportunities.”
If you are a CFO in a for-profit company in the South Bend/Elkhart region and would like to participate in the survey, you are invited to contact Terry Bush at tbush@klcpas.com or call 574-289-4011, ext. 205.
Bush concludes his analysis suggesting, “Perhaps the bottom line from this particular set of tea leaves: ‘We’re not doing all that bad here in our region from a business standpoint.’”
With offices in South Bend, Elkhart and Goshen, Indiana, St. Joseph, Michigan, and Knoxville, Tennessee, Kruggel Lawton CPAs is a full-service accounting and business consulting firm offering assurance services, tax consulting, estate planning, business valuation, and business accounting services. Kruggel Lawton also has national and international capabilities as an independent member of the BDO Alliance USA. You can learn more online at this link: http://www.klcpas.com
Click this link to see the updated BBI graph from Kruggel Lawton CPAs:
