Collier EBCS: Third Quarter 2023 Report
July 31, 2023 / RERI Research Team
Collier County Executive Business Climate Survey Third Quarter 2023 Report
The first half of 2023 is now over and neither the US nor Southwest Florida experienced some anticipated, yet elusive, recession. Labor market conditions remained strong, as the United States unemployment rate came in at 3.6 percent in June 2023, unchanged from the same month last year. Moreover, labor force participation rates in the nation also improved (62.6 percent in June 2023), albeit still below pre-Covid rate, while force participation level continues to trend up and above pre-Covid levels since August 2022. Preliminary results from the national consumer sentiment index were also positive, with the index rising to 72.6 in July 2023, 13 percent above the June 2023 figure and the highest since September 2021. Joanne Hsu, director of the University of Michigan Survey of Consumers, noted that “all components of the index improved considerably, led by a 19% surge in long-term business conditions and 16% increase in short-run business conditions.”
Both consumer confidence and strong labor market conditions have helped to sustain spending level and economic growth, although indicators suggest a slowing down of economic activity. In July, the Federal Open Market Committee increased the target range for the federal funds rate by 0.25 percentage points to 5.25 to 5.50 percent and at least one other increase is expected for the second half of the year. The increase in interest rates makes borrowing more expensive, disincentivizing consumer expenditures and business capital investment.
Results from the Executive Business Climate Index (EBCI) followed suit with the data observed at a national and state level. The index increased in the third quarter of 2023, rising 2.0 points to 51.5. Both current and future economic conditions improved from the previous quarter, rising 2.7 and 3.7 points respectively. On the other hand, future industry conditions slipped 0.4 points to 53.8. The National Federation of Independent Business’ Small Business Optimism Index also increased in June 2023 but remains below their 49-year average.
This quarter, the survey also asked respondents questions regarding obtaining financing. Results showed that slightly more than a third of respondents each used either a large bank or small/regional bank for business purposes. Twenty-four percent of respondents said it was easier to get a loan compared to three months ago, while another 24 percent said it was harder. Fifty-two percent did not apply for a loan over the period. Eighteen percent of respondents were satisfied with the loan terms they received and 12 percent were not satisfied. When asked about their expectations for obtaining financing over the next three month, 47 percent thought it would be easier while 53 percent thought it would be harder.
Downloads:
Collier County Executive Business Climate Survey Third Quarter 2023 Report
Previous Collier County Executive Business Climate Survey Reports
Acknowledgments:
We would like to thank all of the executives that participated in our survey. Without your continued feedback each quarter, our surveys would not be possible. Furthermore, we would also like to thank our sponsors, Collier County Government and the Greater Naples Chamber of Commerce, for helping make the survey happen.
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