Monday, July 8, 2019

Economic Outlook Falls After Second Quarter. CEOs Most Concerned About Business Cycle, Political Polarization & Trade Wars

Read Richmond Times-Dispatch coverage >

 

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 through a comprehensive Virginia CEO Economic Outlook Survey. 

The second quarter 2019 CEO Economic Outlook survey by the University of Richmond’s Robins School of Business and the Virginia Council of CEOs finds that Virginia CEOs’ expectations for sales, capital spending, and employment over the next six months fell compared to their expectations last quarter. Overall, expectations at the end of the second quarter were similar to those from Q1 and Q2 of 2018. 

Uncertainty around the effects of tariffs and continuing workforce challenges seem to be tempering small business CEOs’ confidence in the future,” said Scot McRoberts, executive director of the Virginia Council of CEOs. “That said, 70% of those surveyed expect growth in the next six months, so I would rate this as a positive outlook.”

“CEOs seem to expect a slowdown in the future, but see the current economy as relatively strong,” Randy Raggio, Associate Dean at the Robins School of Business. Raggio administers the survey and collects the responses each quarter. He adds, “The percentages of CEOs who expect decreases in sales, capital spending and hiring is nearly identical to last quarter. The real change is in those who expect to stay the course vs. grow.”

The following survey results from the first and second quarters of 2019 show projections for the next six months for sales, spending and employment:

Economic Index Historical Data

YearQuarter 1Quarter 2Quarter 3Quarter 4
2019100.594.13
201894.6092.73104.3097.97
2017108.97103.6399.17106.3
2016102.0089.0089.67107.37
201593.9093.4299.8092.67
201486.07

88.7196.1095.92
201386.4091.6092.5389.57
201294.1081.1381.1777.57
201185.6374.1781.1788.63
201081.3394.4792.27

VIRGINIA CEOS SHARE CONCERNS OVER ECONOMIC SLOWDOWN AND CHINESE/MEXICAN TARIFFS

CEOs were asked to select the single issue that has them most concerned about the economic outlook for the future. Nearly 30% of CEOs are most concerned about a slowdown in the economy as part of the normal business cycle (29.73%), 20.27% are concerned about the impact of political polarization, and 13.51% chose trade wars. 

With the potential for increased tariffs on Chinese and Mexican imports, CEOs were asked how tariffs would impact their business.

  • More than half of CEOs indicated a somewhat (43.24%) or large (13.51%) negative impact of tariffs on Chinese imports
  • 43.24% indicating no impact (Chinese tariffs)
  • More than 30% of CEOs indicated a somewhat (29.73%) or large (2.7%) negative impact of tariffs on Mexican imports
  • 67.57% indicating no impact (Mexican tariffs)
  • No CEOs indicated any positive impact of tariffs on imports from either country

EXECUTIVE SUMMARY

  • More than 70 percent expect an increase in sales (down more than seven percentage points from the last quarter) 
  • Nearly 38 percent expect capital spending to increase (up 1.7 points from last quarter)
  • More than 52 percent of respondents expect employment to increase over the next six months (down nearly 12 points from the last quarter)
  • Seventy-four CEOs responded to the survey, which was administered June 18-25
  • Multiple industries are represented in the sample, including construction, manufacturing, finance, insurance, and retail 
  • The average company revenue (most recent 12-month period): $16.5 million
  • The average employment count: 64

READ COMPLETE ECONOMIC SURVEY RESULTS

The Robins School and VACEOs jointly conduct the quarterly survey, which regularly asks about expectations for sales, capital spending and employment, plus other relevant issues, helping Virginia companies anticipate business conditions and plan for growth. The Robins School adapted the survey from the Business Roundtable, an association of CEOs of American companies that conducts a similar survey nationally. Randy Raggio, associate dean at the Robins School, administers the survey and collects the responses each quarter. The survey has been administered quarterly since 2010.

Read Richmond Times-Dispatch coverage >

REQUEST RESULTS

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 Scot McRoberts at smcroberts@vaceos.org.

Posted by Staff at 2:22 pm
Tuesday, April 16, 2019

Economic Outlook Ticks Up After First Quarter

 

Read Richmond Times-Dispatch coverage >

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 through a comprehensive Virginia CEO Economic Outlook Survey. 

The first quarter 2019 CEO Economic Outlook survey finds that Virginia CEOs’ expectations for sales, capital spending, and employment over the next six months rose compared to their expectations last quarter. Overall, expectations at the end of the first quarter were the second-highest recorded over the past year, and significantly higher than their expectations in the first quarter of 2018.  

Says Scot McRoberts, executive director of the Virginia Council of CEOs, “The small business CEOs I work with are running at capacity. For most, if they could hire more of the right employees, they would be producing even more.”

“Despite the growing concerns about the potential for a slowdown, Virginia CEOs are still positive on the economy. Most CEOs cite strong demand, order backlogs and planned growth for their expectations,” said Randy Raggio, Associate Dean at the Robins School of Business. Raggio administers the survey and collects the responses each quarter.

Economic Index Historical Data

YearQuarter 1Quarter 2Quarter 3Quarter 4
2019100.594.13
201894.6092.73104.3097.97
2017108.97103.6399.17106.3
2016102.0089.0089.67107.37
201593.9093.4299.8092.67
201486.07

88.7196.1095.92
201386.4091.6092.5389.57
201294.1081.1381.1777.57
201185.6374.1781.1788.63
201081.3394.4792.27

 

EXECUTIVE SUMMARY

The 2019 first quarter survey found that executives’ expectations for sales and hiring and capital spending increased slightly. To summarize, CEOs predictions over the next six months include:

  • Nearly 78 percent expect an increase in sales (up more than six percentage points from the fourth quarter results)
  • Thirty six percent of respondents expect capital spending to increase (up three percentage points from last quarter)
  • More than 65 percent expect employment to increase (up nearly five percentage points from last quarter)
  • 72 CEOs responded to the survey, which was administered March 19-27
  • Multiple industries are represented in the sample, including construction, manufacturing, finance, insurance, and retail 
  • The average company revenue (most recent 12-month period): $10.2 million
  • The average employment count: 60

 

READ COMPLETE ECONOMIC SURVEY RESULTS

The Robins School and VACEOs jointly conduct the quarterly survey, which regularly asks about expectations for sales, capital spending and employment, plus other relevant issues, helping Virginia companies anticipate business conditions and plan for growth. The Robins School adapted the survey from the Business Roundtable, an association of CEOs of American companies that conducts a similar survey nationally. Randy Raggio, associate dean at the Robins School, administers the survey and collects the responses each quarter. The survey has been administered quarterly since 2010.

Read Richmond Times-Dispatch coverage >

REQUEST RESULTS

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 Scot McRoberts at smcroberts@vaceos.org

Posted by Staff at 9:32 am
Thursday, January 10, 2019

CEO economic outlook declines slightly; CEOs weigh in on makeup of next congress

 

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 through a comprehensive “Economic Outlook Survey.”

The fourth quarter 2018 CEO Economic Outlook survey finds that Virginia CEOs’ expectations for sales and capital spending over the next six months fell compared to their expectations last quarter, while expectations for increased employment rose.  Overall, expectations at the end of the year remained higher than their expectations in the first and second quarters of the year.

“In all industries and sectors, the CEOs I work with report that demand remains very high. Most don’t expect a recession until 2020,” said Scot McRoberts, executive director of the Virginia Council of CEOs.

“The survey shows that CEOs remain positive on the economy,”  said Randy Raggio, Associate Dean at the Robins School of Business. Raggio administers the survey and collects the responses each quarter. He adds, “Despite recent drops in the stock market, most see strong demand and expect 2019 to be profitable.”

HOW WILL THE NEW CONGRESS MAKEUP AFFECT BUSINESS?

Last quarter, CEOs were asked how a Democratic takeover of Congress would impact the outlook for their business over the next 12 months. This quarter, with the results of the mid-term elections known, CEOs were asked what impact the new makeup of Congress would have on their outlook for the next 12 months. Although the questions were not identical, it appears that regional CEOs prefer the makeup of the upcoming Congress to one where Democrats control both chambers. Results are portrayed in the table below.

December 2018 September 2018
Large positive impact 3% 8%
Somewhat positive impact 12% 13%
No impact 44% 24%
Somewhat negative impact 35% 32%
Large negative impact 5% 23%

EXPECTATIONS FOR EMPLOYMENT, SALES, CAPITAL SPENDING

The survey’s index, which measures executives’ views on projected hiring, capital spending and sales over the next six months, found that expectations for employment rose from last quarter. More than 60 percent of respondent CEOs expect employment to increase over the next six months, up nearly 3 percentage points from the third quarter survey. An executive summary of survey results is below.

EXECUTIVE SUMMARY

  • More than 60 percent expect employment to increase (up 3 percentage points from last quarter)
  • Seventy-one percent of CEO respondents expect sales to increase (down 8 points from last quarter)
  • Expectations for capital spending fell from last quarter. Thirty-three percent of CEOs expect capital spending to increase (down nearly nine percentage points from last quarter)
  • 91 CEOs responded to the survey, which was administered December 17-21
  • Multiple industries are represented in the sample, including construction, manufacturing, finance and insurance and retail
  • The average company revenue (most recent 12-month period): $10.5 million
  • The average employment: 55

Economic Index Historical Data

YearQuarter 1Quarter 2Quarter 3Quarter 4
2019100.594.13
201894.6092.73104.3097.97
2017108.97103.6399.17106.3
2016102.0089.0089.67107.37
201593.9093.4299.8092.67
201486.07

88.7196.1095.92
201386.4091.6092.5389.57
201294.1081.1381.1777.57
201185.6374.1781.1788.63
201081.3394.4792.27

ABOUT ECONOMIC SURVEY

The Robins School and VACEOs jointly conduct the quarterly survey, which regularly asks about expectations for sales, capital spending and employment, plus other relevant issues, helping Virginia companies anticipate business conditions and plan for growth. The Robins School adapted the survey from the Business Roundtable, an association of CEOs of American companies that conducts a similar survey nationally. Randy Raggio, associate dean at the Robins School, administers the survey and collects the responses each quarter. The survey has been administered quarterly since 2010.

>>Read Richmond Times-Dispatch coverage.

REQUEST RESULTS

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 Scot McRoberts at smcroberts@vaceos.org.

Posted by Staff at 10:54 am
Labels: ,
Tuesday, October 16, 2018

New Tariffs Having Less Impact on Virginia Companies than Expected; CEOs Concerned About Democratic Control of Congress

2018 Q3 Economic Survey

 

 

 

 

 

 

 

 

(Read Richmond Times-Dispatch coverage >)

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 through a comprehensive Virginia CEO Economic Outlook Survey.

The third quarter 2018 CEO Economic Outlook survey by the University of Richmond’s Robins School of Business and the Virginia Council of CEOs finds that Virginia CEOs’ expectations for sales, capital spending, and employment over the next six months increased compared to their expectations last quarter. As a result, the survey’s index rose to its fourth-highest level ever, reversing declines of the past two quarters.

Repeating a question from last quarter, CEOs were asked about the expected impact of tariffs on their business. This quarter, 60 percent expect no impact, 31 percent expect a somewhat negative impact, and only nine percent expect a large negative impact.  These results differ from those last quarter, indicating less impact of tariffs than expected last quarter, as portrayed in the table below.

 

IMPACT OF TARIFFS: HISTORICAL DATA

September 2018

June 2018

Large positive impact

0%

0%

Somewhat positive impact

0%

3%

No impact

60%

41%

Somewhat negative impact

31%

49%

Large negative impact

9%

6%

 

With the upcoming midterm elections, CEOs were asked how a Democratic takeover of Congress would impact the outlook for their business over the next 12 months. Twenty-four percent expect no impact, 21 percent expect a somewhat (13%) or large (8%) positive impact, while 55 percent expect a somewhat (32%) or large (23%) negative impact.

“The survey shows that CEOs are increasingly positive on the economy,” said Randy Raggio, Associate Dean at the Robins School of Business. “This is partly explained by reduced concern about the potential negative impact of tariffs.” Raggio administers the survey and collects the responses each quarter.

“Polarizing politics and tweetstorms from the top seem to have no negative effect on the outlook for small businesses in our area,” said Scot McRoberts, Executive Director of the Virginia Council of CEOs. Adding, “CEOs continue to struggle with workforce shortages but seem to be adapting to this reality.”

Economic Index Historical Data

YearQuarter 1Quarter 2Quarter 3Quarter 4
2019100.594.13
201894.6092.73104.3097.97
2017108.97103.6399.17106.3
2016102.0089.0089.67107.37
201593.9093.4299.8092.67
201486.07

88.7196.1095.92
201386.4091.6092.5389.57
201294.1081.1381.1777.57
201185.6374.1781.1788.63
201081.3394.4792.27

EXECUTIVE SUMMARY

The 2018 third quarter survey found that seventy-nine percent of CEO respondents expect sales to increase over the next six months, up seven percentage points from the second quarter results. To summarize, CEOs predictions over the next six months include:

  • 79 percent expect an increase in sales (up 7 points from last quarter)
  • Nearly 42 percent of respondents expect capital spending to increase (up nearly 4 percentage points compared to last quarter)
  • Nearly 57 percent expect employment to increase
  • 62 CEOs responded to the survey, which was administered September 19 – 25
  • Multiple industries are represented in the sample, including construction, manufacturing, finance and insurance and retail
  • The average company revenue (most recent 12-month period): $13 million
  • The average employment count: 44

READ COMPLETE ECONOMIC SURVEY RESULTS

The Robins School and VACEOs jointly conduct the quarterly survey, which regularly asks about expectations for sales, capital spending and employment, plus other relevant issues, helping Virginia companies anticipate business conditions and plan for growth. The Robins School adapted the survey from the Business Roundtable, an association of CEOs of American companies that conducts a similar survey nationally. Randy Raggio, associate dean at the Robins School, administers the survey and collects the responses each quarter. The survey has been administered quarterly since 2010.

Read Richmond Times-Dispatch coverage.

REQUEST RESULTS

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 Scot McRoberts at smcroberts@vaceos.org.

Posted by Staff at 7:36 am
Labels: ,
Monday, July 16, 2018

2018 Q2 Survey Finds New Tariff Expected to Have Limited Impact on Virginia Companies

Economic banner

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 through a comprehensive Virginia CEO Economic Outlook Survey.

The second quarter 2018 CEO Economic Outlook survey by the University of Richmond’s Robins School of Business and the Virginia Council of CEOs finds that, compared to last quarter, Virginia CEOs’ expectations for sales increased, but expectations for capital spending fell.

The survey’s index, which measures executives’ views on projected hiring, capital spending and sales over the next six months, fell to its lowest level since Q3 2016, marking declines for four of the past five quarters.

Economic Index Historical Data

YearQuarter 1Quarter 2Quarter 3Quarter 4
2019100.594.13
201894.6092.73104.3097.97
2017108.97103.6399.17106.3
2016102.0089.0089.67107.37
201593.9093.4299.8092.67
201486.07

88.7196.1095.92
201386.4091.6092.5389.57
201294.1081.1381.1777.57
201185.6374.1781.1788.63
201081.3394.4792.27

 

“The outlook among small business CEOs in central Virginia remains strong, but unemployment below 3.5% is limiting the ability of many of these businesses to scale,” said Scot McRoberts, executive director of the Virginia Council of CEOs.

“The survey shows that CEOs are generally positive on the economy,” said Randy Raggio, Associate Dean at the Robins School of Business. Raggio administers the survey and collects the responses each quarter. “The recent declines we have seen in the index reflect a shift from high growth to more stable growth. However, there is reason for concern related to tariffs.”

WILL NEW TARIFFS AFFECT BUSINESS?

This quarter, CEOs were asked about the expected impact of new tariffs. None expect a large positive impact; roughly three percent expect a somewhat positive impact. More than 49 percent expect a somewhat negative impact; more than six percent expect a large negative impact. More than 41 percent expect no impact.

EXECUTIVE SUMMARY

The 2018 second quarter survey found that executives’ expectations for sales to increase over the next six months. To summarize, CEOs predictions over the next six months include:

  • Nearly 72 percent expect an increase in sales (up nearly four percentage points/last quarter)
  • More than 37 percent of respondents expect capital spending to increase (down four percentage points/last quarter) 
  • 50 percent expect employment to increase
  • 64 CEOs responded to the survey, which was administered June 26-July 3
  • Multiple industries are represented in the sample, including construction, manufacturing, finance and insurance and retail
  • The average company revenue (most recent 12-month period): $12 million
  • The average employment count: 46

READ COMPLETE ECONOMIC SURVEY RESULTS

The Robins School and VACEOs jointly conduct the quarterly survey, which helps Virginia companies anticipate business conditions and plan for growth. The Robins School adapted the survey from the Business Roundtable, an association of CEOs of American companies that conducts a similar survey nationally. Randy Raggio, associate dean at the Robins School, administers the survey and collects the responses each quarter. The survey has been administered quarterly since 2010.

Read Richmond Times-Dispatch coverage >

REQUEST RESULTS

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 Scot McRoberts at smcroberts@vaceos.org.

Posted by Staff at 3:02 pm
Labels: , ,