Latest Virginia Economic Outlook Index Shows Majority of Employers are Experiencing Ongoing Labor Shortages

October 24, 2022

UNIVERSITY OF RICHMOND ─ Eighty-three percent of CEOs are experiencing a negative impact on their business due to labor shortages. The latest quarterly CEO Economic Outlook Survey conducted by the University of Richmond’s Robins School of Business and the Virginia Council of CEOs also notes that 81% of CEOS have felt a negative impact on their business as a result of inflation.

Fifty-one percent of CEOs expect sales to increase, with 20% expecting at least a 10% increase, while 52% expect employment to increase over the next six months.

The survey found expectations over the next six months for sales and employment were both positive although expectations were down compared with the end of each of the last two quarters. Expectations with regard to capital spending remained primarily flat.

More than half (51%) of CEOs indicated that they expect sales to increase over the next six months.

  • 2% expected sales to be “significantly higher.”
  • 49% expected sales to be “higher.”
  • 20% expected sales to be “lower.”
  • 29% indicated they expected no change.

Twenty-three percent of CEOs expect capital spending to increase over the next six months (down from 31% last quarter), while 21% expect capital spending to decrease. More than 56% expect capital spending to remain flat. 

Fifty-two percent of respondent CEOs expect employment to increase over the next six months. Additionally, 33% expect employment to remain flat while only 15% expect employment to fall. 

Taken as a whole, the results pertaining to sales, capital spending, and employment are less positive than the prior two quarters with the overall Economic Outlook Index decreasing somewhat (73.4 versus 81.3) relative to the results from the end of Q2 2022. 

Additionally, CEOs were again asked their expectations with regard to inflation over the next six months. They reported the following:

  • Inflation will rise further: 50%
  • Inflation will remain at its current level: 21%
  • Inflation will decline: 29%

“The survey results suggest that CEOs have felt a considerable negative impact from both inflation and ongoing labor shortages and are less optimistic overall about the next six months,” said Rich Boulger, associate dean at the Robins School, who administers the survey and collects the responses.

“Rapid inflation and the Fed’s aggressive interest hikes have small business CEOs feeling cautious,” said Scot McRoberts, executive director of VACEOs. “The declining survey index reflects what I am hearing from business owners – they are not feeling optimistic about 2023.”

For additional information about the CEO Economic Outlook Survey and a specific breakdown of the data, click here.