Fargo-Moorhead-West Fargo Business Conditions Survey 2017

Type of Business (159 Firms) These 159 firms all answered the question: “did your firm exceed, meet, or perform below expectations?”

Changes in Business from 2015 to 2016

Performance vs. Expectations

Factors Positively Affecting Performance in 2016 This question was only asked to those that performed above expectations. “If you performed above expectations in 2016, to what would you attribute this higher performance? Please rank the top 5 most important factors that positively affected your business (1=most important, 5=least important).” There were 9 total categories. The one not showing up here is “Less International Competition.” The way this chart should be read is: “73 percent ranked domestic sales increase as one of the top 5 factors positively affecting performance, 65 percent ranked domestic sales increase one of the top 3 factors positively affecting performance, and 42 percent ranked domestic sales increase as the top factor positively affecting performance.”

Top 5 Factors Positively Affecting Performance Rank 2012 2013 2014 2015 2016 1 A Strong State Economy Domestic Sales Increase 2 3 Lower Operating Costs Technology Changes 4 5 Political Stability Less Domestic Competition

Factors Negatively Affecting Performance 2016 This question was only asked to those that performed below expectations. “If you performed below expectations in 2016, to what would you attribute this lower performance? Please rank the top 5 most important factors that negatively affected your business (1=most important, 5=least important).” There were 14 total categories. The three not showing up here are “Insufficient Cash Flow, State Government Regulations, and Rising Gas Prices.” The way this chart should be read is: “69 percent ranked domestic sales shortfall as one of the top 5 factors negatively affecting performance, 60 percent ranked domestic sales shortfall one of the top 3 factors negatively affecting performance, and 34 percent ranked domestic sales shortfall as the top factor negatively affecting performance.”

Top 5 Factors Negatively Affecting Performance Rank 2012 2013 2014 2015 2016 1 Higher Operating Costs Staffing Issues Domestic Sales Shortfall 2 Domestic Competition 3 4 Other 5 Federal Government Regulations

Expectations National Economy in Comparison to Previous Year

Expectations Regional Economy in Comparison to Previous Year

Expectations Your Business in Comparison to Previous Year

Expected Changes in Business - 2017

Historical Unemployment Rate (Source: ND Job Service)

Factors Expected to Adversely Impact Business in Next 12 Months The question asked was: “Please Rank the following 8 items in terms of their likelihood of adversely impacting your business in the next 12 months (1=most important, 8=least important” It should be read as follows: “77 percent ranked difficulty attracting and retaining qualified employees as one of the top five factors expected to adversely impact business in the next 12 months, 71 percent ranked difficulty attracting and retaining qualified employees as one of the top three factors expected to adversely impact business in the next 12 months, and 42 percent ranked difficulty attracting and retaining quailified employees as the top factor expected to adversely impact business in the next 12 months.”

Top 5 Factors Expected to Adversely Impact Business Rank 2013 2014 2015 2016 2017 1 Difficulty Attracting/Retaining Qualified Employees 2 Increasing Government Regulation Increasing Competition 3 Difficulty Providing Health Insurance for Employees 4 Increasing Raw Material/Input Costs 5

Difficulty Attracting & Hiring Qualified Workers

Difficulty in Hiring Qualified Workers The question asked was “If you are having trouble hiring qualified workers, please Rank the following categories of workers in terms of difficulty (1=most difficult to attract/hire, 8=least difficult to attract/hire.” All 8 categories are shown. This should be read as follows: “70 percent of those having difficulty hiring qualified workers ranked experienced workers with technical degrees as one of the top 5 most difficult to attract/hire, 49 percent ranked experienced workers with technical degrees as one of the top 3 most difficult to attract/hire, and 26 percent ranked experienced workers with technical degrees as the most difficult to attract/hire.”

Is Fargo-Moorhead-West Fargo Infrastructure Adequate for Future Expansion?

If FM-WF Infrastructure is Not Adequate, What Improvements are Needed? There was no common theme for other.

Top Infrastructure Issues Rank 2016 2017 1 Expansion of Affordable Housing 2 Improved/Expanded Roads/Highways Improved/Expanded Flood Protection 3 Improved/Expanded Public Transportation Improved/Expanded Telecomm Infrastructure 4 5

Have Oil Prices Impacted Your Business? The impact could be positive if it decreases input costs due to lower fuel/transportation costs. It could be negative due to a decline in economic activity in ND.

Have Crop Prices Impacted Your Business? It could be positive for those that use grains as an input (e.g. a flour mill). It could be negative due to the decline in ND economic activity.

Presentation slides available at: FMWFchamber.com starionbank.com NDSU.edu Special thanks to NDSU Department of Management and Marketing for assistance with survey collection and analysis. MANAGEMENT AND MARKETING