The second quarter 2016 CEO Economic Outlook survey by the University of Richmond’s Robins School of Business and the Virginia Council of CEOs (VACEOs) reflects concerns over the upcoming election and sluggish economy among chief executives in central Virginia.

The survey’s index, which measures executives’ views on projected hiring, capital spending and sales over the next six months, fell sharply from its highest ever level in Q1 2016 back to the long-run average. The survey has been administered quarterly since 2010.

The executives’ revenue outlook remained strong with 67 percent of respondents expecting an increase in sales over the next six months, down only slightly from the 72 percent that projected an increase when surveyed a quarter ago. Thirty-eight percent of respondents expect sales to increase by more than 10 percent over the next six months, which is identical to the number last quarter.

However, only 32 percent of respondents expect capital spending to increase over the next six months, which is down from 40 percent last quarter, while 57 percent expect capital spending to stay flat.  Forty-eight percent expect employment to increase over the next six months, which is down from more than 60 percent last quarter, while 48 percent expect employment to remain flat.

The Robins School and VACEOs 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 first and second quarters of 2016 show projections for the next six months for sales, spending and employment:

 

Projected 6 months sales, spending and employment

2016 Q2

2016 Q1

Increase

No Change

Decrease

Increase

No Change

Decrease

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

67.7%

20.0%

12.3%

71.6%

23.9%

4.5%

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

30.8%

56.9%

12.3%

41.6%

49.4%

9.1%

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

47.7%

47.7%

4.6%

61.0%

33.8%

5.2%

“Although there was a slight increase in the number of executives who expect sales and capital spending to fall over the next six months, this doesn’t seem to signal a pullback,” said Raggio. “Rather, based on open-ended comments in the survey, the results seem to reflect caution as the election approaches and the economy is still on a slow-growth trajectory.”

Next quarter’s survey will ask specifically about the election and the impact of Brexit on central Virginia companies.

"I continue to hear guarded optimism among small business CEOs. They seem to be more guarded this quarter — with global uncertainty and a tumultuous presidential race," said Scot McRoberts, executive director of the Virginia Council of CEOs.

Economic Outlook Index

Survey Date

CEO Economic Outlook Index

Q2 2016

89.0

Q1 2016

102.00

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 190 CEO members. Sixty-five CEOs responded to the survey, and the average company had about $7.5 million in revenue for the most recent 12-month period. Multiple industries are represented in the sample, including construction, manufacturing, finance and insurance and retail). The average employment of companies whose CEO responded to this survey was about 44.

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, training and consulting.

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Related Campus Units

Robins School of Business