Each quarter the Virginia Council of CEOs (VACEOs) and University of Richmond’s Robins School of Business partner to take the pulse of top executives in the region.
The survey results provide a snap shot of the overall economic outlook index for various companies within the region and help central Virginia companies anticipate business decisions and plan for growth.
Overall, the first quarter 2016 CEO Economic Outlook survey by the University of Richmond’s Robins School of Business and the Virginia Council of CEOs (VACEOs) reflects increased optimism 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, increased sharply from its Q4 2015 level to reach the highest level ever recorded. The survey has been administered quarterly since 2010.
“When the index dipped in the 4th quarter, many of us attributed it to an overly optimistic outlook in the 3rd quarter, as the fourth quarter number was back within its normal range,” said Randy Raggio, associate dean at the Robins School. “But looking further into the numbers, for five quarters, more than 70% of CEOs had reported that they expected higher sales, while over that same period fewer than 40% indicated that capital spending would increase. This quarter’s result seems to indicate that companies need to increase both capital expenditures and hiring to meet their expectations for growing sales. That trifecta has pushed the index to its all-time high.”
Says Scot McRoberts, executive director of the Virginia Council of CEOs, “I expected the numbers to be up this quarter, so I’m not surprised by the positive results. The CEOs I work with seem more confident. One indication, registration for our annual Retreat is up, and the number of CEOs choosing to play golf is too – by 33%! My gut tells me this jump in what I call “the Golf Index,” combined with the optimism I hear on the street, shows in the Index this quarter.”
Sales Outlook Holding Steady, Capital Spending Expectations Jump 10 Points
The executives’ outlook on sales remained strong, with 72 percent of respondents expecting an increase over the next six months, nearly identical to the 73 percent that projected an increase when surveyed a quarter ago. More than 40% of respondents expect capital spending to increase over the same period, a roughly 10 percentage point jump from the 31 percent reported in the fourth quarter of 2015. More than 60% of respondents expect employment to increase, up from roughly 57% who expected an increase a quarter ago. (Request full report.)
Economic Outlook Index
The results also provide an overall economic outlook index, which is based on businesses’ projected six-month sales, spending and employment figures.
About the 2016, First Quarter Robins School of Business / VACEOs Economic Survey
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 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. For responding CEOs on this survey, the average member company had roughly $13 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 51.
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 [email protected].
About the Virginia Council of CEOs
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.
About the Robins School of Business
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.