Wisconsin technology executives who responded to the second-quarter 2010 WisBusiness.com Tech Leaders Survey reflected growing pessimism about the strength of the state’s economic recovery in the year ahead.

Forty-one (41.1) percent of those industry executives who responded to the second-quarter 2010 survey believe that economic conditions in Wisconsin will get better during the next year, a dip of more than 15 percentage points from the prior quarter (56.2 percent) and nearly 5 percentage points from the second quarter of 2009 (45 percent).

Conversely, survey respondents are less likely now to characterize the state’s economy as “poor” than they were a year ago or even a quarter ago. In the second quarter, 12.4 percent of the respondents rated the state economy as “poor” compared to 16.3 percent in the first quarter and 22.1 percent in the second quarter of 2009.

Sixty-nine (69.2) percent rated the state’s economy as fair, largely unchanged from the prior quarter and the same quarter of last year. Nearly 18 percent of survey respondents rated the state’s economy as good, unchanged from the prior quarter, but an improvement of almost six (5.8) percentage points from the second quarter of 2009. Less than one percent of those who responded to this quarter’s survey rated the state’s economy as excellent.

Of the four technology industry sectors surveyed, executives in the state’s information technology exhibited the most significant change in perception about the condition of the state’s economy.  In the second quarter of 2009, only 11 percent of those executives rated the state’s economy as good.  In the most recent survey, more than a quarter (26 percent) of information technology executives rated Wisconsin’s economy as good.

The 41 percent of respondents who said they believed the state’s economy will get better in the coming year compares to 56 percent a quarter ago and 45 percent a year ago. The number of executives who believe the state’s economic condition will stay the same during the next 12 months increased more than 11 (11.5) percentage points to 47.0 percent. Nearly 12 (11.9) percent of survey respondents believe the state’s economy will get worse during the next year, an increase of 3.5 percentage points from the first quarter of 2010, but a decrease of more than six (6.2) percentage points from the second quarter of 2009.

“The Tech Leaders Survey continues to mirror the uncertainty that executives in virtually all Wisconsin industries have about the state’s economy,” said Tom Still, president of the Wisconsin Technology Council.  “While there continue to be pockets of optimism in the economic factors we survey, we have yet to see broad, consistent signs of confidence about a recovery.  One thing has remained constant in the survey results during the past year: the confidence and resilience of the entrepreneurs who lead companies both big and small across the many sectors of the state’s technology industry. Their dedication to growing their companies and creating jobs is an important part of Wisconsin’s efforts to rebuild its economy.”

Prospects for own company
More than a quarter (25.7) of the executives who responded to the second-quarter 2010 survey rated the overall prospects for their company as excellent, an nine-percentage-point increase from the prior quarter and a four-percentage-point increase from the same period of last year.  More than 46 (46.5) percent of those who responded to the survey rated the overall prospects for their own companies as good. Twenty (20.1) percent rated those prospects as only fair and 7.1 percent rated them as poor.

Sixty-four percent of the executives who responded to this quarter’s survey believe things will get better for the company they run during the next year, a decline of more than four (4.1) percentage points from the first quarter of 2010 and seven (7.0) percentage points from a year ago.  More than 31 (31.1) percent said things will stay the same for their company during the next 12 months.  Almost five (4.9) percent said things will get worse during the next 12 months.

Industry condition
Executives in Wisconsin’s advanced manufacturing industry who responded to the second-quarter 2010 survey continue to rate the condition of their industry as worse than executives in the other three sectors do.  But quarter-over-quarter shifts in the percentages of advanced manufacturing executives who rated their industry as poor or only fair to good (0.0 percent in the first quarter of 2010 to 13.2 percent in the second quarter) signaled increasing optimism about their industry. But more than three-quarters (76.3) percent of advanced manufacturing executives continue to rate the condition of their industry as fair.

Biotechnology and medical device executives continued to rate their industry more highly than the executives from other industries who responded to the survey.  Forty-seven (47.1) percent of biotech and medical devices executives who responded to the most recent survey rated the condition of their industry as good.  Sixty-four percent of clean tech and agbio executives who responded to the survey rated the condition of their industry as only fair, while 24.0 percent rated the condition of their industry as good.

Forty-eight (48.2) percent of those info tech executives who responded to the survey rated the condition of their industry as only fair. More than 39 (39.3) percent of info tech executives rated the condition of their industry as good.

More than 41 (41.9) percent of those who responded to the survey said the condition of their industry will get better during the next 12 months, a seven-percentage-point decline from the first quarter of 2010 and an eight – percentage-point decline from a year ago. Nearly 50 (49.5) percent said their industry would stay the same during the next year. Almost nine (8.7) percent believe the condition of their sector will get worse during the coming year, an increase of nearly five (4.8) percent from the previous quarter, but largely unchanged from the prior-year quarter.

Availability of capital
Technology industry leader perceptions about the availability of capital remained largely unchanged from the previous quarter.  More than 40 (40.9) percent of the industry leaders who responded to the survey rated the availability of capital as only fair, an increase of 6 percentage points from a year ago. Another 38.1 percent rated the availability of capital as poor, a decline of nearly six (5.9) percentage points from a year ago. Seventeen (16.7) percent rated it as good, mostly unchanged from the second quarter of 2009.

The percentage of those survey respondents who believe the availability of capital will get better during the next 12 months fell nearly six (5.8) percentage points from the previous quarter to 22.7 percent. More than 65 percent of respondents to the second-quarter survey believe capital availability will stay the same during the next year, largely unchanged from the previous quarter, but an increase of nearly seven (6.6) percentage points from a year ago. Eleven (11.6) percent believe capital availability will get worse during the next 12 months, an increase of more than six percentage points from the first quarter of 2009, but unchanged from the prior-year quarter.

Data collected as part of the second-quarter 2010 survey demonstrates that executives of more mature technology companies rate the availability of capital as better than the leaders of less mature companies. Thirty-three percent of executives of mature-stage companies rated the availability of capital as good.  Eleven percent of growth- and early-stage company and five percent of start-up company executives gave the availability of capital the same rating.

While the rating of capital availability as good by mature-stage executives increased from the second quarter of 2009 (from 28 percent to 33 percent), the same ratings by start-up, growth- and early-stage company executives declined by 12 (12.3), three (3.4) and seven (7.3) percentage points respectively.

About the WisBusiness.com Tech Leaders Survey
The WisBusiness.com Tech Leaders Survey is a quarterly, statewide survey of senior executives in the information technology, biotechnology and medical device, advanced manufacturing, and clean technology and agricultural biotechnology industries.  It measures the executives’ ratings on four key business indicators, including the condition of the state’s economy, their industry, their company and the capital markets.  The survey is a project of the Wisconsin Technology Council, WisBusiness.com and the Luminis Group, Ltd.  The survey questionnaire is administered by e-mail and Web-based survey technology.  This quarter’s survey was fielded from June 17-July 8, 2010 (n=185, 23.4 percent response rate).  Respondents represent a geographic, developmental and disciplinary cross-section of the state’s technology industry.  The survey is conducted by the Luminis Group, Ltd., Madison, Wis., using generally accepted methodology, including non-biased question wording and order, response category randomization, where appropriate, and uncompensated respondent participation.
###