Follow the Leaders
CEOs Share Concerns and Economic Outlook for Third Quarter, 2012
Virginia CEOs Reveal Top Three Issues for Next President to Address: Tax Reform, the National Debt, Healthcare
[October 2, 2012] Survey also reports economic outlook index to be flat and financial, economy, and staffing issues of personal concern during 2012 3rd Quarter.
Each quarter the Virginia Council of CEOs (VACEOs) and University of Richmond’s Robins School of Business partner to take the pulse of top executives in the region. The survey results provided by Jeff Pollack, Assistant Professor of Management at the Robins School of Business, provide a snap shot of the overall economic outlook index for various companies within the region and help central Virginia companies anticipate business decisions and plan for growth.This quarter, CEOs were also asked to identify the priorities for the next president.
Presidential Priorities Come January
When asked what economic issue the next president must address in January, tax rates/reform (89.7%), national debt (61%) and healthcare (47%) ranked highest.
Says Scot McRoberts, Executive Director of the Virginia Council of CEOs, “Small Business CEOs I work with are just tired of the uncertainty, whether it is economic growth, health care, regulation, or taxation. I think the presidential election is a huge psychological hurdle. Once we are past it, the hope is that it will mean more decisive leadership from Washington.”
VA CEOs Economic Performance for Third Quarter
The top executives of small and mid-sized companies participating in the survey anticipated changes in projected six month sales, spending and employment, with 61.8 percent saying they expect their company’s sales to increase, down from 66.6 percent last quarter.
The results showed that 31.7 percent of CEOs expect increased capital spending, up from 27.8 percent last quarter, while only 41.4 percent expect employment to increase, down from 50 percent last quarter.
Of business performance in the past six months, 29.3 percent of CEOs said their business performed about as expected, with 26.8 percent saying performance was somewhat worse than expected.
“The September CEO outlook survey results showed little change from August. That’s a bit disappointing because the Richmond Fed’s manufacturing index improved in September, as did the Institute for Supply Management’s national index of purchasing managers,” said Dean Croushore, Professor of Economics and Rigsby Fellow at the University of Richmond. He added, “The CEO index remains well below its level in the first quarter this year, which suggests that the Virginia economy’s growth is likely to remain slow.”
“We see in these data a mixed picture—while anticipated sales and employment growth are both down, relative to Q2, predicted capital spending over the next 6 months is up,” said Jeff Pollack, Assistant Professor of Management at the Robins School, who calculated the results. “The overall outlook index is flat compared to Q2. Economic uncertainty, financial issues, and staffing issues are the top three areas of concerns noted by the current sample of CEOs.”
About the 2012, 3rd Quarter Robins School of Business / VACEOs Economic Survey
The Quarterly Outlook Survey is conducted jointly by the Virginia Council of CEOs and University of Richmond’s Robins School of Business and is an adaption of the national Business Roundtable survey conducted by an association of CEOs of American companies.
This quarters results were based on the collected responses from 84 CEOs in central Virginia. The average annual revenue year-to-date for CEOs responding was $7.97 million. The data were compared to the 2nd quarter 2012 of 90 participants. Multiple industries are represented in the sample (for example, construction, manufacturing, finance and insurance, and retail).
The Robin School of Business / VACEOs Economic Survey projects an overall economic outlook index, which is based on businesses’ projected six-month sales, spending and employment figures.
Request Results
The VA Council of CEOs 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 Scot McRoberts at smcroberts@vaceos.org.
About the The Robins School of Business
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.
About The Virginia Council of CEOs
The Virginia Council of CEOs (VACEOs) 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.
Alan’s Economic Forecast & Five Ways to Prepare Now
As always, our Annual CEO Retreat at Kingsmill brought over-the-top speakers and quality peer-to-peer breakout sessions. We learned how to build a winning sales culture, how Net Promoter Score (NPS) can be part of growth strategy, and we got a chance to share our recession confessions. And, according to economist and closing speaker Alan Beaulieu, we were told to gear up for the next economic storm.
The immediate forecast is as he projected last year. Regardless of what is reported by the news and expressed in opinion polls, Alan reports we are currently in a recovery, that is until 2019. That’s when another recession will likely occur.
Here are five action items to better position your business for the next storm:
- Get aggressive. In Alan’s words, “This is the time to grow your business. We can’t afford to lay back in the weeds.”
- Borrow. How much? “As much money as you can. Until you can’t sleep any more — that kinda money.”
- Spend. Invest in customer market research and use the data align your company around what your customers want. Then become efficient and raise prices.
- Invest or move into areas like water, waste, electricity, or food.
- Prepare for the storm. Watch the Money Supply, Corporate Bonds Rate-of-Change and the U.S. Leading indicators, among others. Alan says, “Ask yourself what would I have done in 2009 if I would have known a recession was coming? Start doing that in 2017.”
About Alan Beaulieu
“One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. Since 1990, he has been consulting with companies throughout the US, Europe, and Asia on how to forecast, plan, and increase their profits based on business cycle trend analysis. Alan is also the Senior Economic Advisor to NAW, Contributing Editor for Industry Week, and the Chief Economist for HARDI.*”
Alan is (unprecedented) three-time presenter at the Annual VACEOS Retreat. He delivers an economic outlook presentation that is a mixed bag of financial stats peppered with specific take aways and occasional bits of humor delivered with comedic precision. His 2012 presentation audio is available for download in it’s entirety to VACEOS members by contacting the office.
Built To Sell, At the Best Price
Every business owner should be building their business to sell, at the best price, whether they wish to sell or not. That is the upshot of two upcoming Virginia Council of CEOs programs.
On August 18, entrepreneur and author John Warrillow will present an interactive, two-hour workshop based on the ideas in his book Built To Sell. Until your business is built to sell, it’s just a job you can’t quit. John will show business owners how they can pull themselves out of the day-to-day grind of their business and create a company that will thrive without their constant care and feeding
Uber-entrepreneur Karen Booth Adams (CEO of Hot Technology Holdings and The Fahrenheit Group) will speak at the Council’s Quarterly Luncheon on September 14. Over the past 17 years, Karen has led ten successful Richmond start-ups and the exit of 4 of those businesses. She will share her experience about what you can do now to increase the value of your business, and her most valuable lessons about how and when to sell your business, and what to expect throughout the process.
Both events are for business-owners only. You can find out more and register here.
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.
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