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Davis and Hodgdon's Vermont economic survey reveals frustration

Submitted by tim on

Davis and Hodgdon Associates CPAs conducted its semi-annual economic survey in January regarding the outlook of Vermont-based businesses.Business owners are primarily concerned about what they will face in 2015 which include health insurance costs, tax law changes, and finding qualified employees. These concerns are consistent with last year’s answers to the survey. Across the board, business owners are reporting that high taxes and rising costs of health care are making it difficult to stay competitive with neighboring states.

These businesses also believe that the US economy is doing well, while a plurality see the Vermont economy as declining. SEE TABLES OF RESULTS BELOW

“Frustrated business owners see the correlation between increased taxes on individuals and the lack of qualified employees,”said John Davis, managing partner of the firm. “The existing tax structure in the state of Vermont makes it difficult for employees to stay put in the state and just as challenging for qualified employees to relocate to our state. Interestingly, it also appears that those businesses headquartered in Vermont, but also doing business outside the state are more optimistic about the Vermont economy than those who are exclusively doing business in Vermont.”

·52% of businesses exclusive to VT believe the state’s economy is declining; 17% feel it is improving.

·Only 25% of VT businesses doing business outside the state believe the state’s economy is declining; 24% feel it is improving.

There was a marginal difference between the two groups in their feelings for the US economy:

·57% of Vermont businesses doing business exclusively within the state, believe the US economy is improving; while 17% believe it is declining.

·64% of VT businesses that also do business outside the state believe the US economy is improving; while only 7% believe it is declining.

One survey respondent noted, “Spending and taxes are out of control... This prompted us to relocate to Iowa at the end of 2014. Vermont probably won't notice the loss of our $500,000 of revenues, but put together with others it will add up. It strikes us that Vermont wants to have a subsistence economy that depends upon tourists, services, and starving artists.”

Additional responses reflect a more optimistic attitude among business owners in regards to the growth of their business. A full 66% expect an increase in company sales over the next six months compared to 57% in July 2014 and 56% in January 2014.

When asked what business economic issue they want to see addressed by the state legislature this year, the majority of respondents were unanimous in saying they want health care cost and other taxing of businesses to be reevaluated. As one respondent summed it up: “legislators need todo anything to make Vermont a more business friendly environment for employers; without them we have no employees.”

Overall Survey Results:

Davis & Hodgdon Associates Semi-Annual Economic Survey

Please indicate your business industry.
Answer
0% 100%
Number of
Responses		 Response
Ratio
Agriculture
   
2 2.4%
Artisan
 
0 0.0%
Construction
   
3 3.7%
Educational Services
   
1 1.2%
Finance & Insurance
   
7 8.6%
Health Care & Social Assistance
   
5 6.1%
Hotel & Restaurant
   
4 4.9%
Information
   
1 1.2%
Manufacturing
   
11 13.5%
Professional, Technical
   
17 20.9%
Retail trade
   
6 7.4%
Transportation & Warehousing
   
1 1.2%
Utilities
 
0 0.0%
Wholesale Trade
   
1 1.2%
Other
   
22 27.1%
No Responses
 
0 0.0%
  Totals 81 100%

County of Headquarters:
 

Answer
0% 100%
Number of
Responses		 Response
Ratio
Addison
   
6 7.4%
Bennington
   
1 1.2%
Caledonia
   
3 3.7%
Chittenden
   
48 59.2%
Essex
 
0 0.0%
Franklin
 
0 0.0%
Lamoille
   
1 1.2%
Orange
   
3 3.7%
Orleans
   
3 3.7%
Rutland
   
3 3.7%
Washington
   
5 6.1%
Windham
   
5 6.1%
Windsor
   
3 3.7%
No Responses
 
0 0.0%
  Totals 81 100%
 
 
Please indicate the scope of your marketplace.
Answer
0% 100%
Number of
Responses		 Response
Ratio
Exclusive to Vermont
   
23 28.3%
Multi-state
   
29 35.8%
National
   
13 16.0%
International
   
16 19.7%
No Responses
 
0 0.0%
  Totals 81 100%
   
Please identify your total annual revenue in fiscal year 2014.  
Answer
0% 100%
Number of
Responses		 Response
Ratio
$0 - $250k
   
13 16.0%
$251k - $1M
   
21 25.9%
$1.1M - $3M
   
17 20.9%
$3M+
   
28 34.5%
No Responses
   
2 2.4%
  Totals 81 100%
 
 
How do you expect your company's sales to change in the next six months?
Answer
0% 100%
Number of
Responses		 Response
Ratio
Increase by less than 10%
   
33 40.7%
Increase by 10-30%
   
21 25.9%
Increase by 30+%
   
1 1.2%
Decrease by less than 10%
   
7 8.6%
Decrease by 10-30%
   
4 4.9%
Decrease by 30+%
   
1 1.2%
No change
   
13 16.0%
No Responses
   
1 1.2%
  Totals 81 100%
   
How do you expect your company's capital spending to change in the next six months?  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Increase by less than 10%
   
28 34.5%
Increase by 10-30%
   
6 7.4%
Increase by 30+%
   
1 1.2%
Decrease by less than 10%
   
12 14.8%
Decrease by 10-30%
   
2 2.4%
Decrease by 30+%
   
5 6.1%
No change
   
27 33.3%
No Responses
 
0 0.0%
  Totals 81 100%
 
Please indicate your business' total number of employees including self.
Answer
0% 100%
Number of
Responses		 Response
Ratio
1 - 10
   
40 49.3%
11 - 25
   
16 19.7%
26 - 50
   
5 6.1%
51 - 75
   
2 2.4%
75+
   
17 20.9%
No Responses
   
1 1.2%
  Totals 81 100%
   
How do you expect your company's employment to change in the next six months?  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Increase staffing by 1-3 people
   
26 32.0%
Increase staffing by 3+ people
   
8 9.8%
Decrease staffing by 1-3 people
   
2 2.4%
Decrease staffing by 3+ people
   
2 2.4%
No change
   
42 51.8%
No Responses
   
1 1.2%
  Totals 81 100%
 
How would you describe the current state of Vermont's economy?
Answer
0% 100%
Number of
Responses		 Response
Ratio
Improving
   
19 23.4%
No change
   
26 32.0%
Declining
   
27 33.3%
Unsure/Do not know
   
6 7.4%
No Responses
   
3 3.7%
  Totals 81 100%
   
How would you describe the current state of the U.S. economy?  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Improving
   
52 64.1%
No change
   
17 20.9%
Declining
   
8 9.8%
Unsure/Do not know
   
3 3.7%
No Responses
   
1 1.2%
  Totals 81 100%
 
Please check the top three key issues for your business in 2015:
Answer
0% 100%
Number of
Responses		 Response
Ratio
Sources of financing
   
15 18.0%
Finding qualified employees
   
42 50.6%
Health insurance costs
   
51 61.4%
Tax law changes
   
29 34.9%
Internet security
   
13 15.6%
Business succession planning
   
19 22.8%
Property tax (education funding)
   
33 39.7%
Other
   
18 21.6%
  Totals 83 100%
   
What is one business economic issue that you would like to see addressed bythe state legislatureby the end of 2015?  
  Number of
Responses
  70
 
Please enter the information indicated below if you would like additional information including results. (optional)
Answer Number of
Responses
First Name 40
Last Name 40
Company Name 38
Email Address 42
     
   
Would you be willing to discuss your survey answers?  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Yes
   
33 40.7%
No
   
40 49.3%
No Responses
   
8 9.8%
  Totals 81 100%
 

The non-scientific survey, customized by Davis & Hodgdon to evaluate small- to medium-sized businesses, was completed by nearly 100 businesses located throughout the state, primarily in Chittenden (59%), but also in Addison (7%), Washington (7%) and Windham (6%) counties.

The industries surveyed included finance and insurance, retail, professional and technical, manufacturing, hotel and restaurant, health care and social assistance, educational services, construction, information, transportation and warehousing, wholesale trade, and agriculture, with the majority (54%) of these respondents reporting annual revenues of $1M+ in fiscal year 2014.

For results of the July 2013 survey go to:http://survey.constantcontact.com/survey/a07e7uhtd3lhj7biz32/results

For results of the January 2014 survey go to:
http://www.dh-cpa.com/assets/files/pdf/JANUARY2014.pdf

For results of the July 2014 survey go to:
http://survey.constantcontact.com/survey/a07e96u192bhu1dnpc8/results

Davis & Hodgdon Associates CPAs is a full-service public accounting firm and members of the Vermont Businesses for Social Responsibility (VBSR), Vermont Business Environmental Partnership (VBEP), Lake Champlain Regional Chamber of Commerce (LCRCC), and Women Business Owners Network (WBON). The firm serves its clients by providing progressive, proactive services through expert staff, high-end technology, and unparalleled efficiency.

Source:WILLISTON, Vt.,March 16, 2015–Davis and Hodgdon Associates CPA
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