Business confidence high for some, says FICA
The Forest Industry Contractors’ Association (FICA) Business Confidence Survey was carried out in March 2022, when 41 contractors (25 logging contractors and 16 silvicultural contractors, all FICA members) were contacted. Participants were asked five questions relating to business confidence over the next six months. Because of COVID constraints the last survey was held in September 2020, so there was an 18-month gap between this survey and the last – previously the survey was carried out every six months. The survey has been conducted since 2009 – our thanks to all those contractors who took the time to participate.
Commentary on the five business confidence measures
• Compared to the previous survey, more respondents expect business conditions to worsen over the next six months, increasing from 20% to 36%. The majority of respondents believe conditions are going to stay the same over the next six months. Over the phone some respondents expressed the view that their selection represented their hopes and that they were also concerned that conditions would deteriorate more than they indicated in the survey. Only 8% of logging contractors believed business conditions are going to improve.
• Expected changes to employment are more positive than those seen in the previous survey. Most contractors (72%) are looking to maintain their current staffing numbers.
• The proportion of contractors looking to purchase machinery/ equipment for replacement has increased from the last survey while the proportion purchasing to expand has declined. Together, 56% of contractors are looking at purchasing new machinery/equipment in the next six months.
• The proportion of respondents feeling they are well informed by their principals/customers has increased from 37% to 52%. Participants who feel like they do not get enough feedback is down to 12% from 28% in the previous survey.
• The number of contractors who would recommend their industry as a good place to work has increased from the last survey, up to 72% from 69% but this is still well below the levels recorded in 2016 to 2019.
Commentary on trends
The assessment of overall business confidence for logging contractors is at a historic low (-28% compared with -29% in June 2019). Recommendation is still the most positive indicator, but it is down on the very high levels from 2016 to 2019. Investment, employees and feedback are all improving from the September 2020 values
Commentary on the five business confidence measures
• The proportion of contractors expecting business conditions to
improve has increased from 10% in the last survey to 31% now.
• A greater proportion (56%) of silvicultural contractors are looking to increase the number of people they employ in the next six months, up from 20% of respondents in the last survey. Correspondingly, the proportion of respondents looking to decrease employee numbers is down to 6% from 45% in the previous survey. • Investment intentions are more positive than the previous survey,
with buying for expansion being the predominant action over the next six months. A total of 69% of respondents are intending to buy new equipment over the next six months
• The perception of feedback from principals/customers has become much more positive with 69% of contractors feeling well informed. Only 6% felt they did not get enough feedback.
• The proportion of respondents who would recommend their industry as a good place to work has increased to 63% from 50% in the last survey. This is the best result since the survey started in March 2009.