>Tatum/Roulston Report

December 15, 2009

>We mentioned last month that we were seeing signs in the Tatum Survey and in our corporate conversations that were concerning to us in regard to the corporate outlook for 2010. Issues ranging from carbon emission standards to health care reform to taxation not to mention the whole regulatory environment and access to capital are weighing heavily on corporate decision making. Rarely have businesses had so much uncertainty in their outlook. It has labored companies coming out of the credit squeeze as to how to allocate their assets. This month the survey reflected an unusual and sudden downturn in the outlook for capital access, capital spending, backlogs and the strength of the dollar. Employment although maintaining current stability seems to be stable due to current conditions. There is little in the corporate outlook to reflect confidence or predictability.

It is hard during the Christmas season to side with the bears. But with a strong market recovery after the fall 2008 credit meltdown, reality is starting to be influenced by an activist government policy that is clearly causing concern in the corporate outlook for 2010. It is our belief at Roulston that we continue to be in an “L” curve with very little visibility and credit access. Without those features we find any significant economic upside to be very dependent on relatively new economic factors from foreign demand to government stimulus to see growth beyond 1-2%. These factors will contribute to some growth no doubt. But it still means strong headwinds for the economy over the next 12 months.

To read the full survey click here.

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