Terrorism Fears Taper Among Businesses

What role is the threat of terrorism playing in businesses' plan to invest, grow and develop?

Economists and companies alike say the risk of terrorism no longer is perceptibly scaring off spending -- although few would be surprised if events changed that approach overnight.

An improving economy and the passage of two years have helped mask nagging worries for businesses about the chances of a similar catastrophe. "We are continuing to see terrorism around the world, and that clearly is a concern on the part of many businesses," said Sung Won Sohn of Wells Fargo & Co. "But I don't think businesses are holding back spending simply because they are afraid of another terrorist attack."

A check of recent filings by nearly two-thirds of the 100 largest U.S. firms found that half mentioned terrorism as a possible business risk.

Smaller companies similarly are cautious. A second-quarter survey of 319 small and mid-sized businesses found that 31 percent of chief executives and business managers cited another terrorist attack as the greatest threat to the U.S. economic future -- second only to 43 percent who singled out poor consumer confidence.
Regardless what they say publicly, "the No. 1 concern for most businesses is still the potential for another terrorist attack," said Mark Zandi of Economy.com. "But nobody talks about it because they think they've done all they can to prepare for it -- investing in security, new technologies, redeploying people and assets, restructuring the way their work is done."

Paul O'Connor, executive director of World Business Chicago, an economic development group, says such thinking would simply add to the terrorists' legacy from the 2001 strike, which he characterized as an attack on American business.

"Two years of hysteria is enough," he said. "If you're making decisions based on hysterical possibilities, you probably shouldn't be running a business."

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