Business Roundtable Releases Fourth Quarter CEO Economic Outlook Survey
(So. Burlington, Vt.) Reflecting nationwide trends, the mood of the chief executives of Vermont's leading businesses took a step downward in the fourth quarter, with leaders decidedly less optimistic about sales prospects, capital outlays, and employment levels for the winter and spring, compared to third quarter forecasts. The mood of the statewide business community was assessed late in the fourth quarter and released today by Vermont Business Roundtable Chairman Tim Volk and President Lisa Ventriss.
"Not surprisingly, given the recurring challenges in international financial markets and the subsequent reaction by consumers, economic expectations within our membership have deteriorated since our last survey in September," Ventriss said. "Vermont's economy is intricately linked to the global economy and it shows in the survey findings."
The Roundtable's fourth quarter '08 membership survey showed greater pessimism today against CEO expectations in the previous quarter. Forty six percent of respondents anticipate no change in sales volume in the next six months, but those who anticipate increases have shrunk from 51 percent in the third quarter to 27 percent in December.
For capital spending, similar percentages of respondents anticipate either no change or a decrease (43 and 40 percent, respectively), and those who anticipate increases have shrunk from 38 percent to 17 percent.
For employment, 40 percent of respondents anticipate a decrease (up from 18 percent in the last survey), 35 percent anticipate no change, and those who anticipate an increase have shrunk from 40 percent to 25 percent.
Survey results from the Vermont CEOs differed somewhat from nationwide results released late last week by the National Business Roundtable. Although more national business leaders expected an increase in sales (38 percent versus 27 percent) they were more reluctant to increase capital spending (10 percent versus 17 percent) and far more likely to expect reductions in employment (60 percent versus 40 percent).
Chairman Volk, who is president of the Burlington-based marketing firm Kelliher Samets Volk, says the results of the CEO survey reflect the realities of the marketplace and subtle differences in Vermont's business community versus national business leaders.
"Although the state is experiencing the same kind of moodiness that is felt nationally, our CEOs appear more willing to maintain employment levels and invest in their businesses. This suggests that there is some insulation along our borders from the full effect of the financial storms affecting other states."
When asked to identify the single initiative that could favorably impact their competitiveness, members offered up several themes, many of which Vermonters have control over, including research and development and training investments, more environmental court judges, reliable telecommunications bandwidth, investments in infrastructure, bolstering credit markets to keep students in college, and high quality regulatory processes, among others.
The Roundtable's CEO Economic Outlook Survey provides a forward-looking view of the economic assumptions and attitudes of chief executive officers for 110 of the state's top employers. Vermont's construction, education, health services, finance, real estate, insurance, hospitality/leisure, manufacturing, information, transportation, utilities, professional/business services and non-profit industries are represented. The response rate for this quarter was 59 percent. Historically, rates have varied from 40 to 73 percent.
1. How do you expect your company's sales to change in the next six months?
Sales
INCREASE
NO CHANGE
DECREASE
Q1 2004
83%
13%
4%
Q2 2004
80%
15%
4%
Q3 2004
71%
25%
4%
Q4 2004
77%
22%
1%
Q1 2005
78%
19%
3%
Q2 2005
75%
23%
2%
Q3 2005
74%
24%
2%
Q4 2005
72%
24%
4%
Q1 2006
78%
20%
2%
Q2 2006
78%
22%
0%
Q3 2006
69%
25%
6%
Q4 2006
73%
23%
4%
Q3 2008
51%
35%
14%
Q4 2008
27%
46%
27%
Totals may not equal 100 due to rounding.
2. How do you expect your company's capital spending to change in the next six months?
Capital
INCREASE
NO CHANGE
DECREASE
Q1 2004
62%
30%
8%
Q2 2004
43%
41%
15%
Q3 2004
51%
42%
7%
Q4 2004
45%
46%
9%
Q1 2005
55%
37%
8%
Q2 2005
49%
43%
8%
Q3 2005
57%
38%
5%
Q4 2005
50%
35%
15%
Q1 2006
45%
45%
10%
Q2 2006
53%
40%
7%
Q3 2006
40%
50%
10%
Q4 2006
56%
39%
5%
Q3 2008
38%
42%
20%
Q4 2008
17 %
43%
40%
Totals may not equal 100 due to rounding.
3. How do you expect your company's employment to change in the next six months?
Employment
INCREASE
NO CHANGE
DECREASE
Q1 2004
57%
38%
4%
Q2 2004
50%
48%
2%
Q3 2004
59%
37%
4%
Q4 2004
58%
39%
3%
Q1 2005
55%
38%
7%
Q2 2005
49%
42%
9%
Q3 2005
49%
44%
7%
Q4 2005
60%
35%
5%
Q1 2006
54%
39%
7%
Q2 2006
50%
45%
5%
Q3 2006
43%
49%
7%
Q4 2006
53%
41%
5%
Q3 2008
40%
42%
18%
Q4 2008
25%
35%
40%
Totals may not equal 100 due to rounding.
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The Roundtable is composed of 110 CEOs of Vermont's top private and nonprofit employers
dedicated to the vision of making Vermont the best place in America to do business, be educated, and live life.
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