Although we do not compete with magazine publishers (except as the US ad sales representative for fDi magazine, published by the Financial Times group), this visit level already exceeds prominent specialty magazines in this niche which have been in circulation for decades to 25,000 to 45,000 recipients such as corporate real estate managers for free (at advertiser expense).  This demonstrates the market demand for the unique independent professional referral service we offer.

December 2007 Analysis: Is the hot market for capital investment projects turning cold now?

Visit activity dropped significantly in August - September 2007, and the reason for this is not yet clear.  It remains at very high levels, and bounced back up again in October.  It has not yet returned to the May - June - July 2007 peak.

We attracted 58,850 visitors in May 2007 - another new record.  We had 61,622 visitors in June 2007, which exceeded a 700,000 per year pace again as the goal we set for 2007.  In July, we had 57,491 visitors.  August and September 2007 were lower.  We had roughly 48,000 visitors in October 2007, and 46,000 in November.  See our latest market analysis comments below these charts - as of the end of February 2008, when visits exceeded 50,000 again.  Visits in the first half of 2008 have been lower than in 2007 - on a pace more comparable to 2006 - as concerns about weakness in the US economy have persisted.

US Project Trends, 1994 - 2006

Analysis of Business Roundtable

Analysis of Directory Visits by State

October 2006 - 2007

Global Analysis of Regional Directory Visits

As we first noted in our September 2007 review of the decline in website visit activity in August, there was a sharp decline in the number of visits at the end of the year.  The reason for this is not entirely clear, but the low visit numbers in December 2007 relative to prior months seem to have been primarily caused by a more dramatic drop than usual in the second half of the month during the Christmas and New Years holidays. 

January 2008 also got off to a slow start as expected, but then picked up later in the month.  This seemed to coincide with economic uncertainties in the US market - including extensive media coverage and political commentary about the risk of an economic slowdown or recession, followed by sharp interest rate cuts by the Federal Reserve and plans for a fiscal stimulus package in Congress, including some potential tax breaks for businesses.  As the month ended, however, the basic economic (and political) picture for 2008 was still ambiguous even though many corporate earnings reports for 2007 were looking pretty good - with the exception of some of the massive write-offs of subprime mortgage securities in the financial services industry and the related downturn in residential construction.

The trend in daily and monthly website visit activity as shown above can be influenced by many factors other than the level of business interest in the planning of capital investment projects.  One must therefore be cautious about attributing causes to such effects, but the downturn was steady enough for several months to be noteworthy.  As our scheduled marketing activities increase once again in 2008, it will be interesting to see how visit levels respond.

For example, many of the visitors arrive via Google search results because we openly share so much content related to this niche market.  We have no control, however, over the way that Google searches work.  A change in the way that Google ranks our pages for keyword relevance relative to others, or the emergence or promotion of other websites with relevant content, can significantly alter our level of visit activity regardless of the actual level of economic activity in the market.

Over time, however, it is interesting to note that the level of visits to our websites has grown very steadily since the start of 2004 until July 2007.  It is not unusual to have a downturn in visit activity during the summer months, but it usually bounces back up pretty quickly in the fall, as shown by the 30 day moving average lines.  In early September 2007, however, the 2006 and 2007 moving average lines crossed for the first time on the way down, after nearly doing so in April 2007.  It bounced right back up to August levels in October, but it is too early to predict a clear trend for 2008.

In short, the annualized pace of visits has dropped from over 700,000 per year in June 2007 to just over 500,000 in September, but bounced back up to over 600,000 again by February 2008.  The downturn was a surprisingly rapid change from what seemed to be a steadily upward trend in visit levels for the last 4 years until that time.  It is too early to tell which way the trend will go from here, but we still had over 600,000 visits as expected in 2007, or roughly a 6% gain over 2006.  We had predicted at the end of 2006 that the rapid growth of recent years would plateau at some point, but we still expect continued growth from this level in 2008.  Instead of 607,312 visits for 2007, we originally expected well over 620,000, and were somewhat surprised by the spring and summer 2007 surge to a much faster pace.  In any case, we still expect comparable visit levels in 2008, probably reaching 600,000 or more visitors again for the year.

Once again, as cautioned at left, it is risky to infer trends from a short period of data which may not be representative of real changes in market conditions.  For example, we have not attempted to correlate the above data to historical records such as the flow of completed commercial real estate transactions worldwide for industrial and office space.

It is simply interesting to note the coincidence with turmoil in the financial markets during the summer of 2007, and in particular the residential real estate market and the impact on the availability and cost of credit, which can influence the cost and financial viability of capital investment projects.

Furthermore, this led to widespread concern about the risks of a recession in the USA, although it certainly seems premature to predict anything more than slower growth in the context of continued strength in global markets.

Turmoil in the US (and UK) banking industry and commercial paper market, and media speculation about this as yet another financial "crisis" and risk of recession, may have temporarily affected the level of planning activity by companies for future capital investment projects.

In other words, some planning activity for future capital investment projects may have been temporarily shelved for a while in summer 2007, which could explain the downturn in visit activity for our business location research websites.  Executives may well have been waiting to see whether this latest "crisis" in the economy was really going to have any visible impact on their own business activity.

A similar situation had seemed to occur in late 2006 when there was also a lot of negative media speculation, particularly around the time of the US elections that year, about when the economy would turn down.  Within a few months, however, confidence seemed to have returned and visit levels were breaking records again.

Ultimately, the level of visit activity to our websites should be somewhat indicative of the level of interest in planning of corporate expansion projects, because these websites are designed to be reference tools for that purpose.

The steady increase in visit levels over recent years seems to have accompanied the rapid growth in the number of capital investment projects during 2004 - 2007 after the slower period of 2000 - 2003 which followed the end of the 1990s boom, such as many illusory "dot bomb" projects which soon disappeared.  It is hard to tell, however, whether visit activity will prove to be a useful leading indicator of project activity in this market, as one would intuitively assume.

For example, as more projects are planned, visits should go up.  As fears of a recession rise, planning activity for expansion projects should drop pretty quickly, and then be confirmed by staying low (if the recession risk turns out to be real) until executives start to perceive an upturn in their business activity, utilize their existing capacity, and feel more confident about the need to invest in expansion again.

Thus, visit activity should drop quickly as fears rise (as executives try to avoid expanding into a recession) and should lag a recovery (as executives wait to see whether the upturn is real enough to face capacity constraints, and thus start planning expansion projects again).

In short, there are a limited number of projects in the USA each year - such as just a few thousand which create over 50 jobs in new locations.

These add up to billions of dollars in capital investment by companies, and many new jobs, with a very valuable impact on the communities involved.

The purpose of this business is to reach the top executives behind such projects and provide them with a better service, like a global "concierge".

We also offer unique research tools, such as Search: Americas as well as the USA Search or Area Search at www.OnTheShortList.com