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CPA firm reveals confidence down among Vermont businesses in economic outlook survey

Submitted by tim on

Vermont Business MagazineDavis and Hodgdon Associates CPAs conducted its semi-annual economic survey in January regarding the outlook of Vermont’s small-to medium-sized businesses, which revealed that respondents have much less confidence in both the Vermont and U.S. economies than they did just six months ago, regardless of their scope of marketplace.Overall more than half of respondents (54%) believe that the Vermont economy is declining as opposed to 37% previously just six months ago.

  • Confidence in U.S. and Vermont economies plummets
  • Majority of Vermont business owners surveyed continue to ponder relocation
  • Finding qualified employees, taxes, health care remain key issues for business owners

·64% of businessesexclusive to Vermontbelieve the state’s economy is in decline (compared to 38% in the previous survey); 8% feel it is improving (compared to 19% previously) and 24% indicate there is no change.

·51% of Vermont businessesdoing business outside the statebelieve the state’s economy is declining (compared to 38% previously); 18% feel it is improving (17% previously), and 23% see no change.

While there is slightly more optimism within both groups when asked about the U.S. Economy, there is still significantly less confidence than that which was present in the July 2015 survey:

·24% of Vermont businesses doing businessexclusively within the state, believe the U.S. economy is improving (compared to 52% in July); while 36% believe it is declining (compared to only 15% in July).

·38% of Vermont businesses, which alsodo business outside the statebelieve the U.S. economy is improving (compared to 57% in July); while 27% believe it is declining (compared to 17% in July).

What continues to be noteworthy within survey results is that even though 54% of respondents feel the economy is declining, the same percentage feel their sales will increase in 2016 (versus 65% expecting growth back in July). With that said, only 38% intend to increase hiring.

Vermont’s small- to medium-sized business owners’ feelings were consistent with the previous survey in that they identified the top three key issues facing their business as tax laws (Federal and Vermont) (57%), health insurance costs (53%), and finding qualified employees (46%).

In fact, when asked what one business economic issue they want to see addressed by the state legislature, a majority of respondents continued to voice concern over healthcare costs and the tax burden. Many comments also reflected a sense of frustration over the need for tax reform in order to attract and retain businesses and workers.

Business owners were once again asked about their consideration of relocation outside of Vermont of both their business and residency. Survey results revealed that more than half (61%) of the nearly 100 small- to medium-sized business owners responding have considered or have put plans in motion to leave Vermont.

Answers were consistent with the previous survey as 20% of respondents indicated that they have put plans in motion during the past 12 months to move their residency outside Vermont. 40% of respondents have considered (but not seriously) moving, while 35% have not considered relocating.

As one respondent noted: “I plan to retire at the end of the year and change my residence soon after. I’m a lifelong Vermonter and I hate to do this, but the politics in this state, especially concerning businesses and taxation are forcing me to.”

“It’s interesting because despite their obvious frustration with the state’s business climate, a large percentage (40%) of business owners would not move their business even if they logistically were able to,” said John Davis, managing partner. “There seems to be a strong desire to remain in Vermont and retain our enviable quality of life, strong education system, commitment to the natural environment. However, their exasperated comments reflect ongoing frustration with the legislature’s lack of effort to make Vermont a more affordable place to live and do business. There is a clear intention among many to leave the state upon selling their business and/or retiring.”

Overall Survey Results:


 

Davis & Hodgdon Associates Semi-Annual Economic Survey

   
Please indicate your business industry.  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Agriculture
   
3 3.0%
Artisan
   
2 2.0%
Construction
   
10 10.2%
Educational Services
   
1 1.0%
Finance & Insurance
   
10 10.2%
Health Care & Social Assistance
   
5 5.1%
Hotel & Restaurant
 
0 0.0%
Information
   
3 3.0%
Manufacturing
   
11 11.2%
Professional, Technical
   
20 20.4%
Retail trade
   
9 9.1%
Transportation & Warehousing
   
1 1.0%
Utilities
 
0 0.0%
Wholesale Trade
 
0 0.0%
Other
   
22 22.4%
No Responses
   
1 1.0%
  Totals 98 100%
 
   
County of Headquarters:  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Addison
   
2 2.0%
Bennington
   
4 4.0%
Caledonia
   
1 1.0%
Chittenden
   
37 37.7%
Essex
 
0 0.0%
Franklin
   
1 1.0%
Lamoille
   
3 3.0%
Orange
   
4 4.0%
Orleans
   
3 3.0%
Rutland
   
8 8.1%
Washington
   
16 16.3%
Windham
   
8 8.1%
Windsor
   
9 9.1%
No Responses
   
2 2.0%
  Totals 98 100%
 
   
Please indicate the scope of your marketplace.  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Exclusive to Vermont
   
25 25.5%
Multi-state
   
39 39.7%
National
   
14 14.2%
International
   
18 18.3%
No Responses
   
2 2.0%
  Totals 98 100%
 
   
If the scope of your marketplace is at the multi-state, national, and/or international level, please indicate the percentage of your business done outside of Vermont.  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Less than 25%
   
31 31.6%
25-50%
   
16 16.3%
50-75%
   
7 7.1%
75+%
   
24 24.4%
No Responses
   
20 20.4%
  Totals 98 100%
 
   
Please identify your total annual revenue in fiscal year 2015.  
Answer
0% 100%
Number of
Responses		 Response
Ratio
$0 - $250k
   
13 13.2%
$251k - $1M
   
25 25.5%
$1.1M - $3M
   
20 20.4%
$3M+
   
38 38.7%
No Responses
   
2 2.0%
  Totals 98 100%
 
   
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%
   
32 32.6%
Increase by 10-30%
   
17 17.3%
Increase by 30+%
   
4 4.0%
Decrease by less than 10%
   
7 7.1%
Decrease by 10-30%
   
11 11.2%
Decrease by 30+%
   
2 2.0%
No change
   
24 24.4%
No Responses
   
1 1.0%
  Totals 98 100%
 
   
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%
   
16 16.3%
Increase by 10-30%
   
11 11.2%
Increase by 30+%
   
5 5.1%
Decrease by less than 10%
   
7 7.1%
Decrease by 10-30%
   
10 10.2%
Decrease by 30+%
   
8 8.1%
No change
   
40 40.8%
No Responses
   
1 1.0%
  Totals 98 100%
 
   
Please indicate your business' total number of employees including self.  
Answer
0% 100%
Number of
Responses		 Response
Ratio
1 - 10
   
37 37.7%
11 - 25
   
25 25.5%
26 - 50
   
11 11.2%
51 - 75
   
2 2.0%
75+
   
21 21.4%
No Responses
   
2 2.0%
  Totals 98 100%
 
   
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
   
24 24.4%
Increase staffing by 3+ people
   
14 14.2%
Decrease staffing by 1-3 people
   
7 7.1%
Decrease staffing by 3+ people
   
7 7.1%
No change
   
45 45.9%
No Responses
   
1 1.0%
  Totals 98 100%
 
   
Please check the top three key issues facing your business in 2016:  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Minimum wage and overtime compensation changes
   
13 13.5%
Taxes (Federal and Vermont)
   
55 57.2%
Health insurance costs
   
51 53.1%
Finding qualified employees
   
55 57.2%
Sources of Financing
   
11 11.4%
Property tax (education funding)
   
26 27.0%
Internet security
   
11 11.4%
Succession planning
   
16 16.6%
Other
   
26 27.0%
  Totals 96 100%
 
   
How would you describe the current state of Vermont's economy?  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Improving
   
15 15.3%
No change
   
22 22.4%
Declining
   
53 54.0%
Unsure/Do not know
   
7 7.1%
No Responses
   
1 1.0%
  Totals 98 100%
 
   
How would you describe the current state of the U.S. economy?  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Improving
   
33 33.6%
No change
   
28 28.5%
Declining
   
29 29.5%
Unsure/Do not know
   
8 8.1%
No Responses
 
0 0.0%
  Totals 98 100%
 
   
What is the one key business economic issue that you would like to see addressed bythe state legislature?  
  Number of
Responses
  86
 
   
If you had the opportunity to move your business outside of Vermont, how likely is it that you would do so?Check all that apply.  
Answer
0% 100%
Number of
Responses		 Response
Ratio
No, I would not want to move my business out of state.
   
39 40.2%
I would but all of my clients are in Vermont so that is not an option for me.
   
16 16.4%
Yes, I would move my business outside of Vermont.
   
30 30.9%
I'm not sure.
   
9 9.2%
Other
   
5 5.1%
  Totals 97 100%
 
   
Has Vermont's overall tax burden caused you to consider relocation of your residence in the last 12 months?  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Yes, plans were put in motion
   
20 20.4%
Yes, but not serious consideration
   
40 40.8%
No
   
34 34.6%
No Responses
   
4 4.0%
  Totals 98 100%
 
   
Please enter the information indicated below if you would like additional information including results. (optional)  
Answer Number of
Responses
First Name 35
Last Name 35
Company Name 35
Email Address 37
     
 
   
Would you be willing to discuss your survey answers?  
Answer
0% 100%
Number of
Responses		 Response
Ratio
Yes
   
38 38.7%
No
   
47 47.9%
No Responses
   
13 13.2%
  Totals 98 100%
 
 

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. For more information regarding demographic breakdown please refer to the survey results link below.

For results of the most recent January 2016 survey go to:
http://survey.constantcontact.com/survey/a07ec2mlmj2ij1i5oo0/results

For results of the July 2015 survey go to:
http://survey.constantcontact.com/survey/a07eb5io4idiay5ocht/results

Davis & Hodgdon Associates CPAs is a full-service public accounting firm with locations in Williston and Rutland Vermont. The firm is a member of Vermont Businesses for Social Responsibility (VBSR), Vermont Green Business, Lake Champlain Regional Chamber of Commerce (LCRCC), Rutland Regional Chamber of Commerce, 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.

WILLISTON, Vt.,February 15, 2016–Davis and Hodgdon Associates CPAs