The fourth quarter 2015 CEO Economic Outlook survey by the University of Richmond’s Robins School of Business and the Virginia Council of CEOs continues to show optimism among chief executives in central Virginia with 73 percent of respondents expecting sales to increase over the next six months. Approximately a third of respondents expect capital spending to increase. 

The survey’s index, which measures executives’ views on projected hiring, capital spending and sales, fell sharply from its third quarter level, which was the highest ever recorded, to its lowest level since the second quarter of 2014. The survey has been administered quarterly for more than five years.

The Virginia Council of CEOs and the Robins School jointly conduct the quarterly survey, which helps central Virginia companies anticipate business decisions 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 following survey results from the third and fourth quarters of 2015 show projections for the next six months for sales, spending and employment:

Projected 6 months sales, spending and employment

2015 Q4

2015 Q3

Increase

No Change

Decrease

Increase

No Change

Decrease

How do you expect your company’s sales to change in the next six months?

73.02%

19.05%

7.94%

73.21%

17.86%

8.93%

How do you expect your company’s U.S. capital spending to change in the next six months?

30.88%

54.41%

14.71%

33.90%

54.24%

11.86%

How do you expect your company’s U.S. employment to change in the next six months?

57.35%

33.82%

8.82%

63.16%

36.84%

0.00%

“With last quarter’s record high in the economic outlook index, I had hoped for continued optimism this quarter,” said Scot McRoberts, executive director of the Virginia Council of CEOs. “The index still reflects a generally positive outlook. The small business CEOs I work with remain somewhat wary, which is reflected in the decline in the index.”

The survey also asked CEOs to indicate how the Fed’s decision to raise interest rates would affect their business in the next six months.  Eighty-two percent report that they expect no impact. This number has risen significantly compared to the 54.7 percent in Q2 and 52.8 in Q1 of 2015 who expected no impact. Seven percent believe it will increase profits. This number represents a slight increase from prior surveys, where 3.8 percent of Q2 respondents and 1.9 percent of Q1 respondents expected a favorable impact. Currently only 10 percent believe it will decrease profits. This number has drastically decreased compared to Q2, where 41.5 percent, and Q1, where 45.3 percent of CEOs believed it would decrease profits.

“The CEOs see very little change in profits because of the Federal Reserve raising interest rates, beginning in December 2015,” said Dean Croushore, economics department chair at the Robins School. “That is, in part, because the rise in interest rates is expected to be very gradual. Interest rates will remain very low by historical standards, and the increase in interest rates has been expected for some time.”

 Economic Outlook Index

Survey Date

CEO Economic Outlook Index

Q4 2015

92.67

Q3 2015

99.80

Q2 2015

93.42

Q1 2015

93.90

Q4 2014

95.92

Q3 2014

96.10

Q2 2014

88.71

Q1 2014

86.07

Q4 2013

89.57

Q3 2013

92.53

Q2 2013

91.60

Q1 2013

86.40

Q4 2012

77.57

Q3 2012

81.17

Q2 2012

81.13

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 Virginia Council of CEOs is a nonprofit organization whose mission is to connect the CEOs of second-stage companies. The Council is led by a board of directors, which is comprised of 18 members and the executive director. Currently, there are 126 CEO members. For responding CEOs on this survey, the average member company had roughly $9.5 million in revenue for the most recent 12-month period. Multiple industries are represented in the sample, including construction, manufacturing, finance & insurance and retail. The average employment of member companies for this survey was 42. 

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.

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 25 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.

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Related Campus Units

Robins School of Business