Local Business Executives Optimistic in Recent Survey

April 14, 2016 / Current News/ Regional News

By John Reid Blackwell, Richmond Times-Dispatch

Richmond-area business executives are as optimistic now about sales and hiring as they have been in about six years, according to a recent survey.

A quarterly polling of 77 chief executive officers conducted jointly by the University of Richmond and the Virginia Council of CEOs showed that 72 percent expect their sales to increase in the next six months.

That was essentially the same as the 73 percent who expected to see a sales increase in the survey conducted during the fourth quarter of 2015.

The most recent sampling, conducted in late March, also showed that 61 percent of local CEOs expect their companies to hire more employees in the next six months, up from 57 percent in the fourth quarter of 2015.

The survey’s overall economic outlook index, which measures executives’ views on projected hiring, capital spending and sales, increased to more than 100, its highest level since the survey started in 2010.

A higher index number indicates higher levels of confidence. The number has ranged from the mid-70s to high 90s since 2010 but has never exceeded 100.

“It is about time for more optimism,” said Scot McRoberts, executive director of the Virginia Council of CEOs. “We started this survey at the end of the recession, or right after it ended. It is the slowest recovery in history.”

About 42 percent of the CEOs said they expect to increase capital spending in the next six months, compared with about 31 percent in the fourth quarter of 2015. The jump in projected capital spending is what really drove the overall index to its most optimistic level, said Randy Raggio, associate dean at the University of Richmond’s Robins School of Business.

“We have reached a point where (businesses) cannot continue to increase sales without increasing capacity,” which means they must make investments in their business, said Raggio, who compiled the numbers.

The results reflect what Neil Lappe, chief executive officer of Midlothian-based WebStrategies Inc., said he has seen in the marketplace. The company provides digital marketing and sales development services to business clients.

“We had a remarkable first quarter,” Lappe said of the company. “We have seen companies more willing to invest in their growth, and they are just more optimistic about what is coming down the line.”

The survey gathers opinions from top executives with small- to medium-sized companies in central Virginia. The companies in the recent polling had an average annual revenue of $13 million in the last 12 months and employed an average of 51 people.

Multiple industries are represented in the sample, including businesses in construction, manufacturing, finance and insurance and retail.