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Virginia CEOs Concerned About Inflation, Maintain Positive Revenue Expectations According to Latest Economic Outlook

October 27, 2023

UNIVERSITY OF RICHMOND ─ The latest CEO Economic Outlook Survey conducted by the University of Richmond’s Robins School of Business and the Virginia Council of CEOs shows that CEOs are apprehensive about inflation and interest rates. The survey also highlights expectations of revenue and employment growth.

Interest Rate Changes

According to the survey, 98% of small business CEOs in Virginia expressed their preference for the Fed to either reduce interest rates or maintain them at their current level. Only 2% of CEOs favored an increase in rates.

Continued Growth

Expectations for revenue and employment over the next six months were positive, with more than half of CEOs expecting revenue to increase and 23% expecting at least a 10% increase.

  • 4% expected revenue to be “significantly higher.”
  • 50% expected revenue to be “higher.”
  • 25% expected revenue to be “lower.”
  • 21% indicated they expected no change.

Forty-two percent of CEOs expect capital spending to increase over the next six months (up slightly from 32% last quarter), while 15% expect capital spending to decrease. Forty-four percent expect capital spending to remain flat. 

Fifty percent of respondent CEOs expect employment to increase over the next six months. 46% expect no change in employment while only 4% expect employment to fall. 

Other Business Challenges

When asked to rank the challenges facing their businesses in the near term, 64% of respondents view inflation and revenue concerns as the most significant issues facing their business in the near term, compared to 74% in a national survey by the U.S. Chamber of Commerce.

 They reported the following as the most challenging:

  • Inflation: 32%
  • Revenue Concerns: 32%
  • Interest Rates: 23%
  • Supply Chain Issues: 13%

Insights from Survey Administrators

“The survey results suggest that CEOs have positive revenue growth expectations but consider inflation an ongoing item of concern. They also strongly prefer that the Fed avoid further interest rate hikes” said Rich Boulger, associate dean at the Robins School, who administers the survey and collects the responses. “The overall index is approximately flat (84.0 versus 85.1 at the end of Q2 2023) and up from 73.4 a year ago.” 

Scot McRoberts, executive director of VACEOs, expressed a different perspective. “The sentiment from CEOs I am talking with lately is far more pessimistic than this data,” he said. “The storm clouds they see must be beyond the survey’s six-month outlook!”

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