Stephen Dunphy / Times staff columnist

The Newsletter: Private companies uncertain about economy

Want a good measure of the economic outlook from a real-world perspective? Check in with the owners of privately held companies in the Northwest. Unfettered by the need to manage quarter to quarter like public companies, the private firms can be more realistic.

A recent survey showed private companies are uncertain about the direction of the regional economy this quarter, according to a survey by the Rainier Group, which provides transition planning for privately held companies.

"Privately held companies are not convinced the region has turned the corner on recovery, and business owners are cautious about what's next," said Robert Gruber, president of the group. Asked to rate the environment for their companies on a 1-to-10 scale, the average response was a neutral 5.4.

One reason for the slow economic recovery is the lack of business investment. No help there from the private companies, with 55 percent saying they will not make capital investments the rest of the year. Almost three-quarters will not launch marketing campaigns, new products or undertake new research efforts, and 55 percent will just maintain, rather than increase, staffing.

But the survey's results also show signs of what could be a rebound. More than two-thirds of Washington-based companies responding said they expect profitability to increase next quarter, and three-quarters of the respondents predict revenues will increase as well.

Boeing will offer a program to convert 747-400 passenger airplanes to freighters, the company said yesterday.

Cargo carriers have been increasingly interested in a conversion program as older 747-400s come on the market at heavy discounts. A Boeing-sponsored conversion usually draws interest because of the quality and factory support for the conversion. Freighter conversions comprise about two-thirds of the world's current cargo fleet.

The 747-400 freighter is expected to be certified and enter service in late 2005. Boeing will do the engineering design work while Taikoo Aircraft Engineering in Xiamen, China, will do the labor.

The real-estate market is hot, especially for downtown condos. Cristalla, a new building set to open in early 2005, sold 57 units last weekend — when sales opened on the condos — grossing more than $20 million.

Customers had formed a line outside the front door well before opening, said sales agent Williams Marketing, and sales were made to 57 of 167 potential customers. The 22-story building, at Second Avenue and Lenora Street, has 197 units ranging from $160,000 to $2.5 million.

Taiwan sent another trade mission to the United States recently. Unlike most trade missions, the Taiwanese came with checks in hand, ordering about $2.7 billion in agricultural products. No stop in Seattle this time. But in 2002, Taiwan purchased Washington state goods — aircraft and agricultural products mostly — worth about $1.1 billion, putting the country in the top 10 as an export destination for state products, according to Jack K.C. Chiang, of the Taipei Economic and Cultural Office here.

Giving back, scholarship division. The fourth annual Costco Scholarship breakfast raised $1.8 million for underrepresented minority students to attend Seattle University or the University of Washington. In the past four years, the fund has raised almost $6 million, providing scholarships to 400 students.

Stephen H. Dunphy's columns appear Tuesdays-Fridays and Sundays. Phone: 206-464-2365. Fax: 206-382-8879. E-mail: sdunphy@seattletimes.com.