(South Burlington, Vt.) Today Lisa Ventriss, President of Vermont Business Roundtable (VBR) and Jeffrey Carr, President, Economic & Policy Resources (EPR), announced the inaugural results of their new joint initiative, the VBR-EPR Business Conditions Survey. The survey, which will be conducted quarterly, is the next generation of the Roundtable’s economic outlook surveys that began in 2004, and will result in a more meaningful and predictive index going forward. The new economic indicator, constructed as a Diffusion Index, is designed to follow economic sentiments of Roundtable members over time, and serve as a tool for analyzing and presenting insight into the Vermont economic outlook; as a leading economic indicator.
This inaugural survey, which achieved a response rate of 74 percent overall, included a strong level of response from every industry sector within the membership. The survey asked eight questions about the economic outlook, demand, capital spending, and employment. This quarter’s survey also included a topical question about the F-35s.
Results of this third quarter survey show that…
- Roundtable members corresponded strongly to the economic reality of a slow recovery from the recent recession, which lasted from December 2007 to June 2009; most responses were mildly positive or neutral;
- VBR responses also aligned closely with the lukewarm results from the recent National Business Roundtable (BRT) survey for capital spending and employment for the coming three months; and
- VBR responses concerning employment the last three months align closely with Vermont Department of Labor data on employment. Employment growth in most sectors is positive or neutral, according to both member responses and Department of Labor data.
The survey also asked CEOs a topical question related to the current discussion around the basing of the F-35s at the Vermont Air National Guard (VTANG).
- Over 80 percent (80.8% percent) of respondents believed that “the continued mission of the Air National Guard including the F-35 jets” would have a positive effect on Vermont’s economy (3 percent replied negative; 16 percent replied neutral)
This graph shows the composite of the diffusion index points, which were generated from the percentages of “positive”, “negative”, and “neutral” replies to the capital spending and employment questions. Diffusion index points measure the level of confidence respondents have about different aspects of the economy, and can range 100 (where 100% of respondents answered “strong positive”) to -100 (where 100% of respondents answered “strong negative”). The diffusion index points, graphed over time, can show the relative amounts of optimism and pessimism that the respondents have about the economic climate. The orange line marks the start of the new data, which uses new methodology; specifically, the new methodology takes into account the “intensity” of replies, and differentiates between “mild” and “strong” answers. The new methodology also weights VBR’s employment by sector to Vermont’s employment by sector, for greater representativeness to the Vermont economy. Although the new points seem less optimistic than the years before, they are lowered because of the new methodology, and present a more accurate view of the current economic climate and future economic expectations; a slow recovery, and slightly less optimism for the three months ahead compared to the last three months. The old points are included to show that the diffusion index is successful at illustrating the economic reality; the diffusion index points calculated from the previous surveys corresponded to the recession and gradual recovery.
The next survey will be conducted in early November, 2013.
The Vermont Business Roundtable (VBR) is a nonprofit, nonpartisan organization of chief executive officers of Vermont’s leading private and nonprofit employers, representing geographic diversity and all major sectors of the Vermont economy. The Roundtable is committed to sustaining a sound economy and preserving Vermont’s unique quality of life by studying and making recommendations on statewide public policy issues. www.vtroundtable.org.
Economic & Policy Resources, Inc. (EPR) has been providing private and public sector clients throughout the U.S. and Canada with problem-solving economic research and analysis services for more than 25 years. Our professionals bring a broad spectrum and a deep reservoir of problem-solving knowledge and experience in applied economics to each assignment. We put our capabilities and experience to work for our clients so that they have the insight and understanding necessary to move forward with confidence. EPR has successfully completed assignments throughout the United States and in eastern Canada. www.epreconomics.com .