The third quarter 2016 CEO Economic Outlook survey by the University of Richmond’s Robins School of Business and the Virginia Council of CEOs (VACEOs) finds that chief executives in central Virginia continue to have concerns over the upcoming election and sluggish economy.

The survey’s index, which measures executives’ views on projected hiring, capital spending and sales over the next six months, remained essentially unchanged from the level recorded last quarter, which is close to its long-run average. The survey has been administered quarterly since 2010.

The executives’ revenue outlook remained strong with 66 percent of respondents expecting an increase in sales over the next six months, nearly identical to the expectation of a quarter ago. Thirty-three percent of respondents expect sales to increase by more than 10 percent over the next six months, which is down slightly from the 38 percent that expected double-digit increases last quarter. Only 36 percent of respondents expect capital spending to increase over the next six months, which is up slightly from the 32 percent last quarter; however, 48 percent expect capital spending to stay flat. Fifty percent expect employment to increase over the next six months, which also is up slightly from the 48 percent last quarter, but 43 percent expect employment to remain flat.

The Robins School and VACEOs jointly conduct the quarterly survey, which helps central 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 following survey results from the second and third quarters of 2016 show projections for the next six months for sales, spending and employment:

Projected 6 months sales, spending and employment

2016 Q3

2016 Q2

Increase

No Change

Decrease

Increase

No Change

Decrease

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

65.5%

24.1%

10.3%

67.7%

20.0%

12.3%

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

36.2%

48.3%

15.5%

30.8%

56.9%

12.3%

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

50.0%

43.1%

6.9%

47.7%

47.7%

4.6%

“Based on open-ended comments in the survey, we continue to see caution among CEOs as the election approaches and the economy is still on a slow-growth trajectory,” said Raggio.

This quarter’s survey asked specifically about the election and the impact of Brexit on central Virginia companies. No executives expect Brexit to have an impact on their business, either positive or negative. However, 74 percent of CEOs believe that Hillary Clinton will win the U.S. presidential election and, while 52 percent believe her election will have no appreciable impact on their company’s profits, 37 percent believe that it will decrease future profits.  

"Clearly, there is angst around the presidential election,” said Scot McRoberts, executive director of the Virginia Council of CEOs. “This may be clouding what I am witnessing as a very robust outlook for area small businesses.”

Economic Outlook Index

Survey Date

CEO Economic Outlook Index

Q3 2016

89.67

Q2 2016

89.00

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. Fifty-eight CEOs responded to the survey, and the average company had about $4.2 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 Robins School of Business is the only fully accredited, highly-ranked undergraduate business school that also is part of a highly-ranked liberal arts university. Bloomberg Businessweek ranks the Robins School’s part-time MBA program among the top 25 in the country. The school’s executive education division offers open enrollment courses and customized leadership development, training and consulting to area businesses.

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