The Tatum Survey of Business Conditions November 2013

Sam Norwood

Highlights of the Month:


• The inflection point to stronger business conditions, noted a month ago, has been confirmed.

• Q4 will be significantly better for business than Q3.

• Cap-Ex and Employment are now the most positive indicators.

• Better conditions are raising anxiety about probable Fed tightening and affecting capital raising conditions.

The fourth quarter strength will surprise the doubters. Equity markets have taken notice. This may be sustainable, but we will not know until the Fed reduces its support for low interest rates.

Tatum Index of Business Conditions
The Tatum Index of Business Conditions is a simple average of the ratio of our respondents for the past 30 days and the next 60 days.

As of November 1, the Tatum Index jumped to 8.6 from 3.8 a month ago, reflecting a stronger trend in business conditions in October and in the forecast for the next 60 days.

Order Backlogs
The percentage of respondents who indicated improving orders on hand declined to 33% from 42%. Those reporting worsened backlogs grew to 16% from 12%.

Capital Expenditure Commitments
The percentage of respondents reporting higher commitments to capital expenditures increased to 38% from 31%. Further, the percentage committing less to capital equipment also declined, moving to 10% from 18%.

The percentage of respondents hiring more workers jumped to 38% from 16% a month ago. However, those indicating they did less hiring declined to 7% from 16%.

Capital Availability and Pricing
The percentage of respondents indicating improved financing conditions rose slightly to 24% from 18%. Those indicating worsening conditions declined slightly to 10% from 19% last month.

We hope you found Tatum's Commentary interesting and useful. We welcome your comments and questions. Click the link below to view the complete report: November 2013 Tatum Survey of Business Conditions

Sam Norwood 
Senior Partner 

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