2014 Business Outlook

Survey Results

Business Changes from 2012 to 2013 Increase No Change Decrease

Sales Revenue 69.7% 11.6% 18.7%

Prices Received for Products/Services 60.9% 31.4% 7.7%

Prices Paid for Raw Materials 61.9% 35.5% 2.6%

Operating Costs as a % of Revenue 68.2% 16.9% 14.9% Employee Compensation 76.6% 20.9% 2.5% Capital Expenditures 51.3% 40.4% 8.3% Profitability 65.0% 17.5% 17.5% Number of Employees 44.3% 48.1% 7.6%

Factors Positively Affecting 2013 Performance

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

DomesticSales

Increase

A StrongState

Economy

LowerOperating

Costs

TechnologyChanges

PoliticalStability

LessDomestic

Competition

FederalGovernmentRegulations

InternationalSales

Increase

LessInternationalCompetition

Percent Ranking in Top 5 Percent Ranking in Top 3 Percent Ranking #1

Top 5 Factors Negatively Affecting Performance Rank 2012 2013

1 Higher Operating Costs Staffing Issues

2 Domestic Sales Shortfall Domestic Competition

3 Domestic Competition Higher Operating Costs

4 Other Domestic Sales Shortfall

5 Staffing Issues Other

Expectations of 2014 Performance

Better 44%

Worse 23%

No Change 33%

National Economy

Better 74%

Worse 3%

No Change 23%

Regional Economy

Expectations of 2014 Performance

Better 69%

Worse 7%

No Change 24%

Your Business

Factors Expected to Adversely Impact Business in Next 12 Months (average rank in parentheses)

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

Difficulty inAttracting and

RetainingQualified

Employees(2.78)

IncreasingCompetition

(3.61)

DifficutyProviding

HealthInsurance for

Employees(4.09)

IncreasingGovernmentRegulation

(4.23)

Increasing RawMaterial andInput Costs

(4.46)

IncreasingTransportationand Fuel Costs

(4.56)

Challenges inAcquiringFinancing

(5.68)

Other (5.27)

Percent Ranking in Top 5 Percent Ranking in Top 3 Percent Ranking #1

0

2

4

6

8

10

12

Oct

-07

Jan-

08A

pr-0

8Ju

l-08

Oct

-08

Jan-

09A

pr-0

9Ju

l-09

Oct

-09

Jan-

10A

pr-1

0Ju

l-10

Oct

-10

Jan-

11A

pr-1

1Ju

l-11

Oct

-11

Jan-

12A

pr-1

2Ju

l-12

Oct

-12

Jan-

13A

pr-1

3Ju

l-13

Oct

-13

Perc

ent

Fargo ND-MN MSANorth DakotaU.S.

Historical Unemployment Rate (source: ND Job Service)

Difficulty in Hiring Qualified Workers (average rank in parentheses)

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%

ExperiencedWorkers withTech School

Degree (2.34)

ExperiencedWorkers with

CollegeDegree (2.51)

ExperiencedWorkers withHigh School

Degree (3.68)

RecentTechnical

SchoolGraduates

(3.71)

Recent CollegeGraduates

(3.53)

ExperiencedWorkers with

GraduateDegree (3.72)

Recent HighSchool

Graduates(5.60)

RecentGraduate

SchoolGraduates

(4.43)

Percent Ranking in Top 5 Percent Ranking in Top 3 Percent Ranking #1

Presentation slides available at: FMWFChamber.com

starionfinancial.com ndsu.edu/mgmt_mrkt

Special thanks to NDSU Department of Management and

Marketing for assistance with survey collection and analysis

Appendix Breakdown of Respondents

Type of Business Business/Professional

Services 15%

Retail Trade 13% Finance, Insurance, Real Estate

13%

Other 9% Nonprofit 9% Leisure/Hospitality 8%

Health Care 7% Technology 6% Manufacturing 5% Wholesale Trade 4% Agriculture 2% Transportation/ Warehousing

1%

Construction 8%

Appendix

1-4 20%

5-19 36%

20-99 30%

100-499 12%

500+ 2%

Number of Employees Business Segments

Appendix

Fargo-Moorhead-West Fargo

43%

Minnesota/ North Dakota

39%

Midwest 6%

Nationwide 10%

International 2%

Target Market Business Segments Appendix