SOURCE: International Profit Associates

October 02, 2008 15:36 ET

Q2 Construction/Contracting SBRB Industry Report: Construction, Contracting Business Owners Report Inflationary Pressures

Small Business Research Board Study Indicates Construction, Contracting Industry Expects the Economy to Drastically Worsen Over Next 12 Months

BUFFALO GROVE, IL--(Marketwire - October 2, 2008) - Owners of construction and contracting businesses expressed their concern regarding the general economy and their expectation that it will drastically worsen during the next 12 months as the Small Business Research Board (SBRB) said its Small Business Confidence Index (SBCI) decreased during the second quarter.

The construction and contracting industry reported an SBCI of 30 during the second quarter, a 13 point decrease from the 43.67 recorded during the first quarter of 2008, according to the study co-sponsored by International Profit Associates.

The second quarter 2008 SBCI set a new historical low of 30 which is slightly less than four points below the indicator's historical low of 33.67 recorded during the fourth quarter of 2007.

The current industry SBCI is 13 points lower than the SBCI of 43 reported in the previous quarter. The current contracting/construction SBCI remains consistent with the U.S. business confidence index during the second quarter of 2008, at only one point higher.

The lower construction and contracting SBCI resulted from a negative outlook regarding the general economy in the next 12 months with 67% of the respondents reporting inflationary pressures. 63% of respondents experiencing inflationary pressures said they have raised prices and 22% have added or increased shipping costs or renegotiated customer pricing agreements.

More than 1,000 small business owners participated in the nationwide poll. The universe of participants is developed from among small businesses across the United States. The SBRB study is a voluntary survey conducted quarterly.

The Small Business Research Board ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations. The SBRB conducts these studies for the benefit of small business owners and managers. The SBRB also provides opportunities for third parties to gain real time insight into the attitudes of small businesses nationwide through the independently conducted research.

The latest information about the Small Business Research Board can be found at www.ipasbrb.com.

International Profit Associates, Inc. (IPA) is the largest privately held provider of management consulting services to small and medium-size businesses in North America. IPA, and its more than 1,800 professionals, offers a wide range of proven and innovative methodologies to help businesses grow and prosper regardless of the economic cycle. IPA either provides directly, or through its affiliated companies, a comprehensive array of business advisory services, tax and estate planning services or merger, acquisition and other financial advisory services in the United States and Canada. More information about IPA can be found at www.ipa-iba.com.

SBRB INDUSTRY COMPARISONS
First Quarter 2008 vs. Prior Quarter

                                                           Construction/
                                              All U.S.     Contracting
Small Business Confidence Index
Q2 2008 (Current)                             30               31
Q1 2008                                       43.67            44.33

Economy Improving
Q2 2008 (Current)                             28               28
Q1 2008                                       42               43

Revenues to Increase
Q2 2008 (Current)                             40               41
Q1 2008                                       52               54

Hiring to Increase
Q2 2008 (Current)                             22               24
Q1 2008                                       37               36


Outlook for the general economy for the next 12 months?
28%      Better
47%      Worse
25%      No Change
Revenue expectations for the next 12 months?
21%      Increase of 10% or more
20%      Increase of less than 10%
30%      Will be about the same
14%      Decrease of less than 10%
15%      Decrease of 10% or more
Expectation for hiring new employees during the next 12 months?
24%      Increase hiring
22%      Decrease workforce
39%      Remain the same
15%      Unsure

*numbers may not equal 100% as a result of rounding

Copyright 2008 Small Business Research Board (SBRB)

For more information about this poll, results of previous studies or other matters related to the SBRB, please contact Jennifer Cumbee, (847) 495-6786.

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