CEOs Optimistic About Next Six Months
A survey of CEOs in central Virginia found they are optimistic about business and the economy for the next six months.
The survey is the work of the Robins School of Business at the University of Richmond and the Virginia Council of CEOs.
Pollack: This is the second time that we've done the survey.
Jeff Pollack is an Assistant Professor of Management at UR.
Pollack: Overall, within this second set of data, we see an increase in the positive nature with which these CEOs view sales, as well as capital expenditures and employee growth within the next six months.
In terms of sales growth over the next six months:
Pollack: At the quarter two survey over the summer, 54% of CEOs said that they expected to increase; compare that to 72% of CEOs in quarter three, so that's an important jump.
And data, he said, indicated:
Pollack: What we see is an increase of people who were neutral in the last survey feeling as though sales will increase in the next six months. We see a similar trend in terms of US capital spending as well as employee growth, and what we're seeing is not necessarily the people who are pessimistic; those people are still pessimistic, but in this particular survey, we can look into the data just a little bit and see that people who thought neutrally are now more positive.
Why are the CEOs optimistic?
Pollack: We don't know the reasons behind these answers, and without reasoning behind these answers, we just get a snapshot in time on the data these CEOs were asked, they felt that, for instance, 72% of them said that they thought that sales will increase over the next six months, 46% said that US capital spending will increase and 52% said that employment, so on the day that they were asked, this is how they felt. Beyond that, I would be hesitant to draw conclusions about what that means for the Richmond area or the broader region, and that's my personal bias as a researcher.
But, Pollack said, there are some interesting similarities to a separate study.
Pollack: The current survey that we have, that we put in the field, is based on the business round table survey. The business round table focuses on larger businesses; we focus on smaller business, but they also have similar data and the data that they have in terms of the CEO economic outlook index shows a similar upward trend from quarter two to quarter three.
I asked if that's the same as seeing similarities between families of different income levels.
Pollack: An apt comparison, 'cause if you have individuals who make over, say, pulling a number out of the air, two hundred and fifty thousand dollars a year, if you ask them how they feel about the economy and what they're buying and what their patterns of behavior are, and then if you ask individuals who make less than fifty thousand dollars a year what their patterns of behavior are and outlook for the future are, in some cases they might have similar responses and in some cases, as you might imagine, they might have very different responses, and so to the extent that they converge, is interesting and to the extent that they might diverge is also interesting. In this case, it seems as though large companies and small companies, from quarter two to quarter three, are converging.
The Executive Director of the Virginia Council of CEOs, Scot McRoberts, said the data reflect what he’s been hearing. Executives are moving out of a period of risk avoidance into a time of opportunity. But, he added, getting financing for growth is constraining some small and mid-sized businesses.
John Ogle, WCVE News