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7 Dec, 2013

Survey Reveals Business, Personal Impacts of Oct 2013 U.S. Federal Government Shutdown


HERNDON, Va.–(BUSINESS WIRE)–December 03, 2013 – The 16-day shutdown of the U.S. government in October 2013 had widespread business and personal impacts that reached far beyond the federal sector and well outside the Washington, D.C. metropolitan area, according to findings of a survey released today by ORI, a market research and strategic business intelligence firm.

“When the shutdown began, the supposition was that impacts would be localized and concentrated on the federal community,” said Kathleen Benson, president of ORI. “But our survey found that the shutdown hit checkbooks and pocketbooks within and outside the D.C. region equally hard, while damaging the perception that government cares about the interests of the business community.”

Key findings of the ORI survey include the following:

  • From the inability to work on federal contracts to the lack of access to federal business services, the shutdown affected a large cross-section of the economy. Nearly four in ten organizations (37%) said they were unable to receive services they needed from the government during the shutdown, which explains, in part, why the shutdown was so widely felt. As a result of the shutdown, nearly one-third (31%) of respondents’ organizations delayed or canceled conferences or events, while one quarter decreased staff hours (24%) and delayed or canceled hiring decisions (23%). These disruptions were significantly higher among federal agencies.
  • The governing climate that led to the shutdown has severely undermined business optimism. A large majority thinks the gridlock in Washington has become a drag on the economy with three-quarters (74%) believing that the governing climate will make strong national economic growth less likely in the next year.
  • Government contractors were more optimistic than others about the prospects for their own businesses, but pessimism about the economy prevails. While nearly eight in ten contractors (79%) said U.S. economy was unlikely to see strong national economic growth in the next year, 44% projected their organization’s revenues to increase in the next year – a significantly higher percentage than any other sector. “This suggests that many contractors continue to see rich opportunity for government spending in the next year, despite the ongoing budget cuts from the sequester,” said John Kagia, ORI’s Director of Strategy & Insight.
  • Alarm about the shutdown mobilized business leaders into action. Three quarters of business owners and senior executives (75%) contacted a member of Congress during the shutdown. At the same time, fewer than 5% of senior executives were optimistic that the government would address priorities that were important to them. “This underscores the extent to which business leaders feel that Washington’s priorities are not aligned with their interests,” said Kagia.
  • Finding qualified staff to support strategic initiatives is a key challenge in the federal community, but recruiting the best and brightest could be a challenge. Approximately half of the federal respondents (55%) and government contractors (45%) indicated that finding qualified employees would be important to their organizations’ success in the next six months. However, as a consequence of the shutdown and surrounding governing climate, two-thirds of all respondents (and a striking 75% of federal staff) believe that qualified candidates will be less likely to want to work for the government. Said Kagia, “This indicates that the shutdown and surrounding debate significantly undermined the perceived stability and security that have been hallmarks of working in the public sector.”

The ORI study, with a sample size of 665, was conducted online from October 15 to October 25. The margin of error is ±3.8.

To find out more about how the results of this study might impact private, nonprofit and public sector organizations, visit www.ORIresults.com/shutdownsurvey.