SMB CEOs’ Economic Outlook Dims
FOR IMMEDIATE RELEASE
June 28, 2011
Robins School of Business –Virginia Council of CEOs 2nd quarter survey finds continued uncertainty about business, economy for the next six months
For the second straight quarter, CEOs in central Virginia have shown a more pessimistic view of business and the economy looking ahead six months, according to the 2nd quarter 2011 CEO Economic Outlook Survey. The findings are in contrast to CEOs’ relative optimism in 2010.
The survey reveals that top executives of small and mid-sized companies anticipate either unchanged or decreased capital spending and hiring. Slightly more than half predict increased sales for the next two quarters. And results show that “economic uncertainty” is the most significant business issue CEOs face today, ahead of rising energy and healthcare costs, staffing, financial issues and political uncertainty.
The Virginia Council of CEOs and University of Richmond’s Robins School of Business jointly conduct the quarterly survey, which helps central Virginia companies anticipate business decisions and plan for growth.
“This is a clear indication that the current mindset of the CEO is to proceed with caution,” said Scot McRoberts, executive director of the council. “We are seeing good growth in a few sectors – health care, IT and staffing particularly. But, there is not a lot of confidence in either the overall growth of the economy or what Washington will do in terms of taxes and regulation.”
The following survey results, from the 2nd quarter 2011 and the 1st quarter 2011, show projections for the next six months for sales, spending and employment:
| 2011 Q2 | 2011 Q1 | ||||||
| Increase | No Change | Decrease | Increase | No Change | Decrease | ||
| How do you expect your company’s sales to change in the next six months? | 54.7% | 32.0% | 13.3% | 69.9% | 21.9% | 8.2% | |
| How do you expect your company’s U.S. capital spending to change in the next six months? | 31.1% | 40.5% | 28.4% | 28.8% | 56.2% | 15.1% | |
| How do you expect your company’s U.S. employment to change in the next six months? | 39.2% | 50.0% | 10.8% | 39.7% | 52.1% | 8.2% | |
The council and the Robins School collected responses from 75 business owners and CEOs in central Virginia. The average annual revenue year-to-date for CEOs responding was $3.3 million. The data was compared to the 1st quarter 2011 survey, which consisted of 73 participants. Multiple industries are represented in the sample (for example, construction, manufacturing, finance and insurance, and retail).
“What we see in these current data, relative to the previous quarter, are more CEOs anticipating no change, or a decrease, in some of their core business practices,” said Jeff Pollack, assistant professor of management at the Robins School, who calculated the results. “Based on data we collected about the issues these CEOs face, it could be that slow economic growth and economic uncertainty are related to this more pessimistic outlook.”
Pollack adapted the survey from the Business Roundtable, an association of CEOs leading U.S. companies that conducts a similar survey nationally.
The results also provide an overall economic outlook index, which is based on businesses’ projected six-month sales, spending and employment figures.
Economic Outlook Index
| Survey Date | CEO Economic Outlook Index |
| Q2 2011 | 74.17 |
| Q1 2011 | 85.63 |
| Q4 2010 | 92.27 |
| Q3 2010 | 94.47 |
The council continues to expand the survey beyond its members, offering any area business owners whose companies gross at least $1 million in annual revenue the opportunity to participate. If enough businesses participate, the council will provide survey results by industry. Participation is free, and all participants will receive copies of the survey data.
Business owners and CEOs who would like to participate in the next survey should contact McRoberts at smcroberts@vaceos.org.
CEO Profile: Kaye Crenshaw
Kaye Crenshaw started her career in the financial services industry where she enjoyed the flexibility of sales and helping people with their financial challenges. This also allowed her to be available for her two young daughters. She always enjoyed making an impact on people’s lives. Kaye opened Mobility Center of VA in 1994, and since then has been able make a difference in her customers’ lives every day. She and her 25 colleagues spend their days “making it easy for those who have it tough,” by providing equipment and services to the disabled community. Their products include wheelchair accessible vehicles, driving aides, elevators, stair-lifts, porch-lifts, and ceiling lifts.
With the aging of the baby boomers, Mobility Center is poised for growth as people will require home modifications to be able to stay in their homes. Ninety percent of homeowners over the age of 65 say that they want to remain living in their homes as long as possible. Mobility Center can also help seniors remain mobile with vehicle modifications, scooter lifts or even a new vehicle. Mobility Center is unique in the industry because they provide both home and vehicle modifications. This year, Kaye’s husband Lee has opened a sister store in Norfolk called the Ability Center. The Ability Center provides “Mobility products for your home, auto, and lifestyle”
Kaye has been a member of the Virginia Council of CEO’s since 2005. She tells us that the Council has been a resource for information and has provided an opportunity to get strategic help from some great friends and advisers. Quite simply, VACEOs has helped her grow!
With her two daughters working with her at the Mobility Center, Kaye’s business is a place she can call home, where they make a difference in people’s lives every day. When not at work, you can find Kaye spending time with Lee, enjoying her three grandchildren, and traveling whenever and wherever she can.
CEOs Comment on Job Growth
Several Virginia Council of CEOs members offered comments in a March 5 Richmond Times Dispatch article on the small drop in the unemployment numbers. David Gallagher, President of Dominion Payroll Services, said that his firm had grown in 2010 and expected to add more employees in the next few months. Gallagher said that his firm’s clients are hiring more than they are terminating, and that growth is picking up.
Mike Meyer, CEO of NetSearch Direct, reported more talk of hiring among his company’s clients, as well as steady growth at his own company. In the Virginia Council of CEOs’ and Robins School of Business Ecnomic Outlook Survey from January 2011, more than half of the CEOs surveyed indicated that they would be hiring in the first quarter of 2011.
Commenting on data from Council members showing flat employment in 2010, Council Executive Director Scot McRoberts was quoted:
What I am hearing now in 2011 is that people are starting to hire,” McRoberts said. “There is that pent-up demand. They have grown a bit and now they need to add people.”
CEO Retreat Program Announced
The Virginia Council of CEOs recently announced the program for the 2011 CEO Retreat. This much anticipated annual event will feature presentations by small business blogger Jay Goltz and economist Alan Beaulieu. Also speaking will be the author of “How to Hire A Players”, Eric Herrenkohl and the CEO of Geomagic, Ping Fu.
The CEO Retreat will be held on April 6-8 at Kingsmill Resort in Williamsburg, Virgnia. Your can download the CEO Retreat 2011 Brochure or see the VACEOs web site for more details.
More than 100 CEOs of small and mid-sized Virginia businesses are expected to attend.
CEO Profile: David Ingram
Like many VACEOs members, the term “entrepreneur” describes David Ingram best. He started his first business in high school at age 16, bought a competitor and then sold the combined business while in college. After college, he succeeded in running sales and operations organizations for both privately and publicly held companies, but was destined start his own business again. In 2001 he started Capital TechSearch to leverage his years of experience making the right and wrong hiring decisions to help his clients make the best possible decisions in building their most important asset — their people.
Capital TechSearch is a world-class technical recruiting firm supplying organizations with information technology talent on a contract, contract-to-hire, or permanent basis. Over the past nine and a half years Capital TechSearch has earned an outstanding reputation for effective sourcing, deployment and management of key talent for some of the regions’ top private and public companies primarily serving the health care, web services, and government space. This strength led Inc. Magazine to recognize Capital TechSearch as one of the fastest growing privately held companies in America for the past three years running.
Ingram’s first book, “15 Bedtime Stories That Keep Entrepreneurs Awake at Night,” was recently released and features stories from his 15 years of entrepreneurship. Many members of the VACEOS shared their stories and gave Dave great suggestions on how to make the book even better. Learn more at www.15bedtimestories.com.
Dave has been a member of the VA Council of CEOs for four years. He is on the board and has served on the membership, sponsorship and retreat committees. He is currently the 2011 CEO Retreat chairman. Dave gives the VA Council of CEOs credit for helping him make it through the ups and downs or running a business. He calls his CEO Roundtable his “oasis” – a place of refuge to work on his business, to get perspective and inspiration.
A graduate of Hampden-Sydney College, Dave frequently lectures on business topics. He and wife Meridith and their children live in Richmond.
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