SOURCE: Small Business Research Board

March 27, 2008 11:31 ET

Fewer Small Construction, Contracting Businesses Considering Expansion; Near Term Investment Plans to Focus on Customer Needs Finds Latest Small Business Research Board Study

NORTHFIELD, IL--(Marketwire - March 27, 2008) - The reality of the staggering economy and decreasing confidence about near term business prospects are compelling fewer owners and managers of small construction and contracting businesses to consider expanding their operations, according to the results of the latest Small Business Research Board (SBRB) poll released today.

The SBRB report said that 30% of the small construction and contracting businesses during the fourth quarter were planning to expand their businesses the next 12 to 24 months. This was six points fewer than the 36% who felt the same during the third quarter 2007 reporting period.

Furthermore, respondents to the survey co-sponsored by International Profit Associates, said they are re-orienting their operating agendas to focus more heavily on customer issues than making investments in facilities and processes.

Providing more services (22%) and adding new products (20%) were the two most mentioned enhancements that will be made by the owners and managers participating in the study who intend to grow their businesses. They ranked fourth and sixth respectively during the prior quarter.

Expansion at existing locations (19%) fell to third in the most recent rankings after having been the cited the most during the third quarter. Enhancing customer services capabilities (18%) was fourth during the last quarter.

Human resources continued to be the most important ingredients to improving productivity during the fourth quarter. Improved staff training, the addition of more staff and implementation or enhancement of employee incentive programs were the top three elements cited for improving productivity. Those were followed by improvements to existing automation or technology and adding more automation or technology, which finished fourth and fifth.

The opinions about issues impacting their business were consistent with the recently reported decline in confidence. The SBRB Construction & Contracting Industry Small Business Confidence Index (C-SBCI) dropped 12 points or nearly 25% during the fourth quarter of 2007 indicating owners and managers had significant concerns about their near term business prospects.

Declines during the fourth quarter in all three key indicators drove the C-SBCI lower. The fourth quarter construction and contracting industry indicators were similar to what was found among all businesses participating in the nationwide study.

The current Construction & Contracting Industry Index is 1.33 points higher than the 33.67 reported for all U.S. small businesses during the fourth quarter of last year. The overall U.S. SBCI of 33.67 was nearly 10 points (21.7 %) lower than the index of 43 reported during the third quarter of 2007.

More than 950 owners and managers participated in the national study.

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 universe of participants is developed from among small businesses across the United States. The SBRB study is a voluntary survey conducted via phone and email. The latest information about the Small Business Research Board can be found at www.biznus.net.

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, based in Buffalo Grove, Il., and its more than 1,800 professionals offer 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.

For more information about this poll, results of previous studies or other matters related to the SBRB, please contact Raymond D. Minkus, (847) 441-4192.

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