FOR IMMEDIATE
RELEASE: Sept. 11,
2008
CONTACT: Lisa Ventriss, President, Vermont
Business Roundtable, 802-865-0410; Tim Volk, Chair, Vermont Business Roundtable,
802-862-8261.
Business
Roundtable Releases Third Quarter CEO
Survey
(So. Burlington, Vt.) The
chief executives of Vermont’s leading businesses are cautious about sales
prospects for the fall and winter, but they continue to invest in the state’s
economy hoping for the business climate to improve. The mood of the business community was
assessed in the middle of the third quarter and released today by Vermont
Business Roundtable Chairman Tim Volk and President Lisa
Ventriss.
“Clearly the expectations of the business community for robust economic
activity have fallen since our last survey in late 2006,” Ventriss said. “These expectations seem to mirror the
nationwide economic slowdown and gloomy predictions for the New England
economy.”
The Roundtable’s third quarter ’08 membership survey showed greater
pessimism today against CEO expectations in the fourth quarter of 2006, when the
last survey was conducted. In 2006,
73 percent of responding CEOs expected sales to increase in the first half of
2007. In August, 2008, when the
latest survey was conducted, only 50 percent expected increased sales in the
six-month period ahead. When those
predicting “no change” are included however, Vermont’s economy fared
better. Eighty-six percent of
respondents thought sales would stay the same or get better in the next six
months versus 96 percent in 2006.
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.
“We have to be careful in making too many comparisons, because of the gap
in the data,” he said, “but these numbers confirm what we are hearing and
seeing. Unemployment in Vermont is
up by one percent over last year, and those numbers are reflected in the 60
percent of employers who predict level or declining employment in the period
just ahead.”
Considering capital investments, 38 percent of the CEOs responding said
they plan to increase capital spending.
That sets an all-time low when measured against expectations over the
five year history of the survey, which have ranged from a low of 40 percent in
the third quarter of 2006 to a high of 62 percent in March of 2004. When those
predicting “no change” are included, however, again, Vermont’s outlook improved.
Ninety percent of respondents predicted that capital spending would stay the
same or get better in the next six months, versus 95 percent in
2006.
Ventriss also cautioned against a direct comparison between 2006 and 2008
based only on this data. “These are
different times. This is a
different economy. Some of the CEO
members of the Roundtable have even changed,” she said. “The long-term value of this survey is
that it establishes a new benchmark for gauging the views of the business
community in the future.”
Although the 2008 third quarter survey showed that eighty-two percent of
CEOs expect their employment levels to stay the same or increase, the 18 percent
predicting a decrease in employment is the largest group since the surveys began
in 2004. If additional job losses
come to pass, employment in Vermont would mirror the national trend. On Sept. 5 the U.S. Department of Labor
reported that unemployment nationwide has reached 6.1 percent. In July, the Vermont Department of Labor
pegged Vermont’s unemployment rate at 4.8 percent, a one point increase from a
year ago. The Roundtable’s survey,
however, neither predicts nor enumerates the number or quality of the jobs
expected to be lost in the time ahead.
The Roundtable’s CEO Economic Outlook Survey measures the attitudes of
chief executive officers for 120 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
63 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%
Totals may not equal 100 due to
rounding.