VBR & EPR Release 1 Qtr 2015 Business Conditions Survey Results [3.31.15]

1st Quarter 2015 Business Conditions Survey Results Show Neutral Outlook

March 31, 2015 –  Today, Lisa Ventriss, President of Vermont Business Roundtable (VBR) and Jeffrey Carr, President, Economic & Policy Resources (EPR), announced the 1st Quarter results of their joint initiative, the VBR-EPR Business Conditions Survey.

The survey, which is conducted quarterly, 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”.1 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 also looked closely at the non-weighted, “raw” data that the survey provides. The raw data can be easily compared to the national Business Roundtable CEO Survey, a quarterly survey of national and multi-national companies. The national Business Roundtable CEO Survey contains similar questions to the VBR/EPR Survey in terms of employment and capital spending. Comparing these two surveys revealed that Vermont companies expect a greater degree of hiring or stability than national companies, while both national and Vermont business expected a similar degree of capital spending.

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 answers a value of 0, “mild negative” answers a value of -0.5, and strong negative values of -1.0. The diffusion index numbers are then formulated based on these numerical values. A value of 100 would mean that every respondent answered “strong positive”, a value of 0 would mean that every respondent answered neutrally, and a value of -100 would mean that every respondent answered “strong negatively.”

The latest survey, which was conducted during the first two weeks of March 2015, achieved a response rate of 70 percent overall, and included a 50 percent or greater response rate from all but two sectors within the membership. The survey asked eight retrospective and prospective questions about the economic outlook, demand, capital spending, and employment. Survey results show that:

  • For the fourth quarter in a row, most responses to the overall question about the state’s business climate outlook were neutral to mildly optimistic.
  • More than half of respondents (62 percent) shared negative outlooks specifically with ease of hiring for available positions; and,
  • For the first time, the professional/technical services sector had the most optimistic outlook on expected demand and employment (58 percent and 50 percent, respectively).

The first graph below shows the diffusion index of overall economic outlook, which measures the level of confidence (optimism or pessimism) respondents have about different aspects of the economy based on the first question on the survey, and can range from 100 (where 100% of respondents answered “strong positive”) to -100 (where 100% of respondents answered “strong negative”).
For this reporting period, the diffusion index of overall economic outlook shows an overall decline in optimism from Q1 2014 to Q1 2015, indicating that Vermont CEOs continue to feel neutral to mildly optimistic about the business climate for the coming three months.


The next graph below shows the composite index of the diffusion index points for the questions relating to demand, capital spending, and employment in the next three months. The majority of responses were neutral or mildly positive, keeping the line steady between 15 and 20 index points (recall that the maximum index points would be 100, and 0 would be true neutral).


Also included in the survey was the opportunity for Roundtable members to express their opinions on other topics affecting their businesses. The greatest frequency of responses from members concerned the state’s efforts around health care reforms, including health care financing (including the payroll tax increase). According to members, such uncertainty has resulted in many businesses delaying investments in their growth strategies.

The next survey will be conducted in early June, 2015.

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.

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