[2010 The Year Ahead] Cover Story

A review of some recent news stories affecting businesses today, a 2010 weather forecast and the results of PCT’s online survey to determine what pest management professionals expect this coming year.
 

Consumer Confidence on the Mend?

If past history is any indication, the pest management industry may not be recession-proof, but it is recession-resistant, generally faring better than many other service sectors during an economic downturn. Nonetheless, if Americans feel their job is at risk or are currently unemployed, it doesn’t matter how essential the service, they may delay treatment or attempt to solve the pest problem themselves if they’re feeling pessimistic about the future.

That’s why the most recent Consumer Confidence Survey from The Conference Board should be welcome news to anyone in the service sector. While consumers are continuing to monitor their spending closely and remain pessimistic about their short-term prospects, they are cautiously optimistic about the future, which may bode well for the coming termite season.

Lynn Franco, director of The Conference Board Consumer Research Center, says that "expectations for the short-term future increased to the highest level in two years. The Present Situation Index, however, continued to lose ground and remains at a 26-year low. A more optimistic outlook for business and labor market conditions was the driving force behind the increase in the Expectations Index…however, consumers remain rather pessimistic about their short-term prospects and this will likely continue to play a key role in spending decisions in early 2010."

While consumer sentiment remains a concern for many service providers, PMPs are generally optimistic about their future business prospects, according to a recent Insight Express Online Survey conducted for PCT magazine. In a random sample of PMPs across North America, 69 percent said they are optimistic about the pest management industry in 2010, while only 8 percent indicated they are pessimistic. Then again, after enduring one of the worst economies since the Great Depression, 2010 has to be better than 2009, doesn’t it?

The Consumer Confidence Survey® is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world’s largest custom research company. (Source: December 29 press release from The Conference Board)
 

*****

2010 FORECAST: Will a SOGGY SPRING follow a frigid winter?

According to the 2010 Farmers’ Almanac, this winter will see more days of shivery conditions: a winter during which temperatures will average below normal for about three-quarters of the nation. A large area of numbingly cold temperatures will predominate from roughly east of the Continental Divide to west of the Appalachians. The coldest temperatures will be over the northern Great Lakes and the Upper Peninsula of Michigan.

Near-normal amounts of precipitation are expected over the eastern third of the country, as well as over the Pacific Northwest and Northern Plains, while drier-than-normal conditions are forecast to occur over the Southwest and the Upper Midwest/Great Lakes. Only the Central and Southern Plains are expected to receive above-average amounts of precipitation.

What lies ahead for February, March and April, a critical period in the pest control industry when pest activity increases and termite swarming occurs throughout much of the U.S.? According to the National Weather Service’s Climate Prediction Center, expect above average precipitation throughout the entire South, stretching from California to Texas to Florida. Otherwise, most areas of the country are expected to receive normal amounts of precipitation with the exceptions of the Pacific Northwest and mid-Central states Ohio, Kentucky and Indiana, which are expected to be drier than normal.
 

*****

Small Business Owners Increasingly Optimistic

Four in 10 business owners have an optimistic outlook on business prospects and feel the current economy creates opportunities for their businesses, on par with a little more than a year ago when the macroeconomic climate was significantly different. This is according to the American Express OPEN Small Business Monitor survey, a sample of 727 small business owners/managers of companies with fewer than 100 employees.

While optimism has stabilized, owners are still managing their firms with caution. Capital investment plans are at their lowest level in the eight-year history of the Monitor, hiring plans are down significantly and many entrepreneurs are adjusting their own retirement plans. Forty-two percent of business owners plan to make investments as a way to grow their business, down from 53 percent last year.

Small business owners are not taking this recession lying down. Many are finding new ways to manage costs. Nearly half of business owners (45 percent) are bartering for new products or services with customers or suppliers and nearly one quarter (23 percent) report their barter activities have increased. Additional steps include instituting hiring freezes (48 percent), no longer taking a salary (30 percent), having a family member work pro bono (27 percent), renegotiating leases and supply contracts (25 percent), cutting benefits (16 percent) and working a second job (18 percent).

When looking at the 37 percent of owners who say the current economic environment creates opportunities for their businesses, two-thirds have a positive outlook on the economy, half plan to make capital investments and one-third plan to hire.

The majority of this positive cadre of entrepreneurs (86 percent) has small firms (1 to 9 employees). Nearly half (48 percent) are found in the services industry.

Source: American Express OPEN Small Business Monitor survey