Vermont Business Roundtable and Economic & Policy Resources 3rd and 4th Quarter 2017 Business Conditions Survey and Index Results Show Continuing Neutral Outlook
(South Burlington, Vt.) Today, Lisa Ventriss, President of Vermont Business Roundtable (VBR) and Jeffrey Carr, President, Economic & Policy Resources (EPR), announced the Q4 2017 outlook results of their joint initiative, the VBR/EPR Business Conditions Survey and Index.
The latest survey, which was conducted during the first two weeks of October 2017, achieved a response rate of 68 percent overall and included a 50 percent or greater response rate from 10 of 15 represented sectors within the membership. Survey results show that:
• Roughly two-thirds of respondents (63%) shared negative outlooks specifically with ease of hiring for available positions, improved from the previous survey (71%);
• Approximately two-thirds of responses to the question about the state’s overall business climate outlook were neutral (63%), a decline from the previous survey (48%). The remaining responses were split between positive and negative, 19% and 18%, respectively.
• The information sector had the most optimistic outlook on the general business climate (100% optimistic), while the education sector had the least optimistic outlook (50% neutral, 50% pessimistic). This is the second quarter in a row that the information sector led in optimism about the general business climate.
Mr. Carr of EPR stated that “Nationally, the post-election optimism regarding prospects for a markedly improved performance for the economy has met with reality. Hopes of a ‘Trump Bump’ have moderated, and this seems to be reflected in the latest responses to the survey.” This was evidenced by the easing back in the post-2016 election increase in positive responses earlier in 2017 which has now moved back to a more “neutral outlook.”
“While member responses regarding the relative ease of hiring have improved over last quarter, it continues to be a significant pain point for business in Vermont, regardless of industry. Until we can prime the talent pipeline with more and better qualified workers, business’s outlook will remain stuck in neutral”, said Roundtable President Lisa Ventriss.
The raw (unweighted) survey data are easily compared to the quarterly, national Business Roundtable CEO Survey of national and multi-national companies, which contains similar questions to the VBR/EPR Survey in terms of employment and capital spending (www.brt.org). Comparing these two surveys revealed that:
• Vermont companies are predicting slightly lower capital spending plans and a more neutral or stable employment outlook than their national counterparts. When comparing VBR/EPR survey results against national GDP data (Table 1), we find that
• Vermont’s outlook appears to remain on a “neutral” trend, given the responses from this and the previous survey, and continues to demonstrate that economic conditions overall remain somewhat uncertain in many areas of the State and sectors of Vermont economy.
Also included in the survey was the opportunity for Roundtable members to express their opinions on other topics impacting their businesses.
• Based on the highest frequency of comments, respondents expressed concern about the finding qualified employees, challenging workforce demographics, the affordability of Vermont, and the uncertainty regarding healthcare.
• The quarterly survey is a tool for tracking business conditions and forecasting the future of Vermont’s economy, by providing insight into business sentiments and trends. Specifically, the survey provides both a look back at the previous quarter and a predictive index going forward.
• The data for both the backward and forward-looking questions are weighted to the Vermont economy by sector employment and turned into “diffusion indices”. These diffusion indices provide a tool for analyzing and presenting insight into the Vermont economy over time through the sentiments of the Roundtable members. The survey asked eight retrospective and prospective questions about the CEOs’ economic outlook, demand, capital spending, and employment.
1 Each question on the survey is weighted by sector employment and the diffusion number is formulated by giving each “strong positive” answer a numerical value of 1.0, “mild positive” answers a numerical value of 0.5, neutral provide a tool for analyzing and presenting insight into the Vermont economy over time through the sentiments of the Roundtable members. The survey asked eight retrospective and prospective questions about the CEOs’ economic outlook, demand, capital spending, and employment.
The next survey will be conducted in early 2018.