CEOs Share Optimism in Quarterly Survey
CEOs in central Virginia anticipate increases in capital spending and hiring during the next six months, but expect sales to remain relatively level due to concerns about slow growth and continued economic uncertainty, the 1st quarter 2012 CEO Economic Outlook survey reveals.
Top executives of small and mid-sized companies participating in the survey plan to hire more staff, and some 71 percent predict increased sales during the next two quarters, an increase from 68 percent last quarter. The results also show that slow growth is currently the most significant business issue CEOs face. While economic uncertainty is still a concern, it is no longer the most significant one, as in previous surveys, showing a 7 percent drop.
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.
“We see in these data a continued trend of increased optimism (Outlook index of 94.10 relative to 88.63 in Q4 2011) that started in Q2 of 2011,” said Jeff Pollack, assistant professor of management at the Robins School, who calculated the results. “We see more CEOs predicting increases in capital spending and employment over the next 6 months. Economic uncertainty, slow growth, and staffing remain the primary areas of concerns noted by the current sample of CEOs.”
Pollack adapted the survey from the Business Roundtable, an association of CEOs of American companies that conducts a similar survey nationally.
The council and the Robins School collected responses from 93 business owners and CEOs in central Virginia. The average annual revenue year-to-date for CEOs responding was $9.7 million. The data were compared to the 4th quarter 2011 of 88 participants. Multiple industries are represented in the sample (for example, construction, manufacturing, finance and insurance, and retail).
“I am pleased to see the numbers this quarter,” said Scot McRoberts, executive director of the council. “Nearly 60 percent say that they will increase hiring. I think that is a very good sign in an environment where business owners are still reluctant to hire unless absolutely necessary. We have strung together three consecutive increases in the economic outlook index. That trend highlights the growing optimism I hear from area CEOs.”
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
|
|
Q1 2012 |
94.10 |
|
Q4 2011 |
88.63 |
|
Q3 2011 |
81.17 |
|
Q2 2011 |
74.17 |
|
Q1 2011 |
85.63 |
|
Q4 2010 |
92.27 |
|
Q3 2010 |
94.47 |
|
Q2 2010 |
81.33 |
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.
The Virginia Council of CEOs is a nonprofit organization, whose mission is to connect the CEOs of second-stage companies so they can learn from each other and grow their businesses. Learn more at www.vaceos.org.
The Robins School of Business is the only fully accredited, top-ranked undergraduate business school that also is part of a top-ranked liberal arts university. Bloomberg Businessweek ranks both the Robins School’s undergraduate and part-time MBA programs among the top 20 in the country in their respective categories. The school’s executive education division offers open enrollment courses and customized leadership development programs for individuals and businesses.
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.
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.”
CEOs Forecast Increased Sales, Capital Spending
CEOs in central Virginia have an optimistic view of business and the economy for the next six months, according to the 2010 CEO Economic Outlook Survey.
The area’s top executives anticipate an increase in sales and forecast an increase in capital spending, 3rd quarter survey results show.
The Virginia Council of CEOs and University of Richmond’s Robins School of Business jointly conduct the quarterly economic outlook survey, which helps central Virginia companies plan for growth. Additional findings reveal that only 8% of CEOs surveyed expect to reduce employment.
“These findings echo what I have been hearing from Richmond area CEOs. They are moving out of a period of risk-avoidance and into a time of opportunity,” said Scot McRoberts, executive director of the Virginia Council of CEOs. “Small and mid-sized businesses will bounce back faster because they are nimble. However, many are constrained by the difficulty of obtaining financing for growth.”
The results from last month’s 3rd quarter survey and the 2nd quarter survey show CEOs’ sales, spending and employment projections for the next six months.
| 2010 Q3 | 2010 Q2 | ||||||
| Increase | No
Change |
Decrease | Increase | No
Change |
Decrease | ||
| How do you expect your company’s sales to change in the next six months? | 72.0% | 18.7% | 9.3% | 54.4% | 38.9% | 6.7% | |
| How do you expect your company’s U.S. capital spending to change in the next six months? | 46.7% | 33.3% | 20.0% | 35.6% | 42.2% | 22.2% | |
| How do you expect your company’s U.S. employment to change in the next six months? | 52.0% | 40.0% | 8.0% | 41.1% | 52.2% | 6.7% | |
The council and Robins School surveyed 73 area business owners and CEOs of companies with more than $1 million revenue in central Virginia. Results were calculated by Jeff Pollack, assistant professor of management at the Robins School, who adapted the survey from the Business Roundtable. The economic index is based on businesses’ projected six-month sales, spending and employment figures.
Economic Outlook Index
| Survey Date | CEO Economic Outlook Index |
| 2010 Q3 | 94.47 |
| 2010 Q2 | 81.33 |
“We are excited about these data. If the trend upward in the CEO Economic Outlook Index continues, it could represent positive economic news for the Richmond area and surrounding region,” said Pollack.
Business owners and CEOs who would like to participate in the next survey should contact McRoberts at smcroberts@vaceos.org.
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