The IU East Business and Economic Research Center conducted the 2023 East-Central Indiana Business Survey online in September and October 2023.
Email invitations were sent to over 1,000 local business operators to seek their opinions and expectations of the business and economic conditions in the East-Central Indiana region, which comprises seven counties, including Fayette, Franklin, Henry, Randolph, Rush, Union, and Wayne. 124 valid responses were received.
One-fifth of the surveyed businesses in the region had maintained production or business activities in 2023 at about the same level as in 2022.
Over half had increased these slightly by less than 5% or significantly by more than 5%.
Most businesses had kept or expanded their employment in 2023.
Only about one-tenth of them had reduced their capital investments.
94% of the businesses had experienced a rise in their costs of doing business.
Despite the challenging year, about two-fifths of the businesses had managed to increase their profitability, whereas about one-quarter had preserved the 2022 profitability level.
Upon planning their 2024 operations, 89% of the surveyed businesses expected to increase or maintain their 2023 production or business activity level.
While two-thirds of the businesses anticipated maintaining their 2023 employment level, more than 90% of the surveyed businesses planned on maintaining or increasing their capital investments in 2024.
Of the businesses surveyed, 42% expected an increase in profitability, despite 82% of the survey participants anticipating an increase in the cost of doing business.
The IU East Regional Business Confidence Index and its sub-indexes continued to decline in 2023 compared to 2022. 2023’s 2.4% decline of the IU East Regional Business Confidence Index was attributed to the decline of its present situation sub-index by 5% and expectation sub-index by 0.5%.
These declines suggest that businesses in the region had again gone through a more challenging year in 2023 compared to 2022. On the other hand, the businesses still had about the same expectations for 2024 as they had for 2023.
The payroll cost appeared to be the cost that most surveyed businesses in the region anticipated to increase in 2024, followed by those of insurance and utilities. About one-third or more of the businesses anticipated an increase in their costs on employee benefits, office, shop, and/or factory supplies, inventory, taxes, machine or equipment repair and maintenance, and machine or equipment replacement.
A closer examination of the participants’ responses for the industry sectors revealed that the individual costs expected to increase in 2024 by half or more of the participants in industry sectors were payroll, insurance, utilities, employee benefits, and taxes.
At the same time, the survey results reflected that the industry sectors expected to suffer from the increase in more than five surveyed costs were banking, agriculture, and other sectors, including animal industry, childcare, construction, residential and/or commercial cleaning, and utilities.
Business operators in the region believed that the anticipated rise in their costs of doing business in 2024 primarily stemmed from the anticipated increase in prices of supplies (for office, shop, and/or factory), wage rates, utility rates, operating costs other than those of utilities, prices of raw materials, transportation-related costs, and benefits per employee.
The anticipated increase in the price of supplies (for office, shop, and/or factory) was considered the major cause of the anticipated increase in the cost of doing business in 2024 by most industry sectors, followed by the anticipated increase in wage rates and anticipated increase in utility rates.
Banking was the only industry sector anticipated to suffer from more than five surveyed reasons.
The surveyed businesses were concerned about their ability to hire quality and reliable workers to work in the region and the high cost of borrowing due to federal interest hikes.
Their recommendations focused on maintaining or enhancing daily operations, business efficiency, and customer services, attracting visitors by holding various events in the region, and promoting shop local to the residents.
The front and back covers of the 2023 East- Central Indiana Business Survey Report were designed by the IU East student Jaxon Skidmore, the winner of BERC’s 2024 Student Design Contest.
The full report can be read on the IU East Business and Economic Research Center website under the Regional Business Research section.
