B U S I N E S S P U L S E©

The financial meltdown has There are some differences between

raised havoc with the economy. goods producing companies and
Business Leaders in Northeastern service providing companies. In
Wisconsin - the rest of the world terms of negative impact, the two
as well - are all wondering how groups are generally similar: 66% of
long it’ll take to recover. goods producing leaders expressed
a negative impact compared with
The Nicolet Bank Business Pulse©,
70% of service producing companies.
shows 49% of business leaders
Almost one-third (31%) of goods
believing it will take the economy
Business Several Years to recover from its
producing companies have not
experienced any impact compared
current mess. A smaller percentage
with 14% of service companies.
Leaders: (45%) says it will take a Couple of
Years to recover. Six percent say A few (4%) of the service companies
it’s just a Bump in the Road. have seen a positive impact on their
Recovery The most recent Nicolet Bank
business, while none of the goods
producing companies experienced
Business Pulse© was conducted in
Measured October between the 13th and
the same. (Some of the service
producing companies may be
20th. Since then, conditions have
providing services to assist goods
in Years worsened. During the week the
study was conducted the Dow was
producing companies in dealing
with the downturn, or perhaps are
9,300; The SP 500 was 1,000. Since
selling products that have a low
then, we’ve elected a new president
price niche such as The Dollar Store,
and watched indexes across the
Walmart, etc.)
globe plunge even lower.
Thirteen percent of the service
Full Frontal companies are not yet sure what the
impact will be compared with 3%
Financial Impact of the goods producing companies.
The downturn has had an There are no differences by size
immediate impact on the personal of company.
investments of business leaders:
Nine-of-10 (93%) say it has had
a Negative Impact (59% say How will the financial
Significant Negative Impact; 34%
say Somewhat Negative.)
meltdown impact our
economy in the future?
(Fully 93% of us want to know
what the 7% were doing to have
dodged the bullet to their Personal
Investments! Even Warren Buffet
lost $22 Billion of his net worth Several Recovery
since September.) Years to in a Couple
Recover of Years
Sixty-nine percent say the downturn
has had a Negative Impact on 48% 45%
Executive Summary: their business. (15% say Significant
End of Q3/08 Negative Impact; 54% say
Somewhat Negative.) 7%

Just a Bump in the Road

What Are Leaders Doing? Who’s to Blame?
Business leaders were asked what
actions they initiated as a result
of the downturn: 57% indicated
that they discussed it with
their management team; 45%
re-evaluated their company’s
financial position and/or increased
their due diligence of companies
they do business with (44%).
Nearly a third (32%) met with
their banker; 22% discussed the
issue with their Board of Directors;
4% studied their exposure;
2% changed the company’s
401(k) plan.
Few differences exist between
goods producing companies
and service providing companies
regarding actions taken. Goods
producing companies are
somewhat more likely to
engage in more due diligence
(50% v. 39%) and are more likely
to have met with their banker
(39% v. 27%).
In terms of size of company, those
with more than 500 employees
were more likely to have created
an internal group to study their
exposure (14%) compared with
companies with 500 or fewer
employees (4%).
Smaller companies (500 or fewer
employees) were more likely
to re-evaluate their financial
positions (49%) compared with
29% for larger companies.
Naturally, some of the larger
companies may have a greater
financial foundation to fall back
on than some of the smaller
companies.
There’s been an awful lot of finger
pointing during this disaster –
and there appears to be plenty of
blame to go around. Most (81%)
business leaders around here
think Wall Street bears the Major
Responsibility; 54% ascribe Major
Thirty-eight percent say stricter
Responsibility to Congress; 23% to
enforcement of existing laws;
Consumers; 19% to President Bush.
31% say restrictions on CEO
When asked how much compensation; 28% see class-
confidence business leaders have action suits as effective
in individuals/groups to solve the tools/threats.
problem, 53% have a Great Deal
Fully 25% want to increase federal
or Moderate Level of Confidence
regulation of financial institutions
in the private business sector;
and 13% want mandatory
47% have (had) a similar view
restructuring of Boards of
of John McCain; 46% for Ben
Directors. What next?
Bernanke; 44% for Henry Paulson;
21% for Barack Obama; 21% for
Republicans in Congress; 18% for
SEC Chair Christopher Cox; 17% Summary
for financial foreign investments
Nicolet Bank data suggest that
and; 11% for Democrats
goods producing companies are
in Congress.
feeling an immediate impact of
A slim majority of business this downturn and, as is often the
leaders (57%) support the $700 case, the impact on service provid-
ing companies lags a bit behind.
billion dollars bailout that became
The consensus among Business
law just two days before this
Leaders in Northeastern Wisconsin
survey was conducted. Of those
seems to be that there won’t be a
supporting the bailout: 6% Strongly
quick end, we’ve not yet reached
Favor the bailout; 24% Moderately
bottom and in the end, nearly all
Favor it; 27% Slightly Favor it.
companies will feel the pain.
Thirty-nine percent were opposed
(17% Strongly; 14% Moderately;
While business leaders do express
8% Slightly). Four percent are
modest support for the recent
not sure.
bailout, there is not a lot of
confidence in various political
First a Perp Walk then… actors or groups to solve the
What will help prevent this in problem(s).
the future? A majority of Business
Leaders in NEWi (60%) say
Significant Jail Time and
fines would be very effective.

How the Survey is Conducted

The Nicolet Bank Business Pulse© is a Quarterly Study of CEOs in NE Wisconsin (Brown, Calumet,
Door, Kewaunee, Manitowoc, Marinette, Oconto, Outagamie, Shawano, Winnebago Counties) and
Menominee, Michigan. It is designed and implemented by IntellectualMarketing, LLC.
Participants include: 27% in manufacturing; 24% in services; 18% retail trade; 4% wholesale trade;
5% finance, real estate, insurance; 5% in transportation, communications, utilities; 5% in construction;
11% in other industries. 21% have fewer than 6 employees; 34% have 6-25; 15% have 26-50;
12% 51-100; 11% 101-250; 2% 251-500; 4% 501-1,000; 2% have 1,001 or more.
QUESTIONS to Dr. David G. Wegge (920) 217-7738; david@intellectualmarketing.com