Vermont Business Roundtable and Economic & Policy Resources
1st Quarter 2014 Survey Results Show Positive Outlook
(South Burlington, Vt.) 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, is the next generation of the Roundtable’s economic outlook surveys that began in 2004, and provides 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.
The 1st Quarter survey, which achieved a response rate of 70 percent overall, included a 50 percent or greater response rate from 12 of the 14 sectors within the membership. The survey asked eight questions about the economic outlook, demand, capital spending, and employment. Survey results show that…
- Roundtable members continue to correspond strongly to the economic reality of a slow recovery from the recent recession, which lasted from December 2007 to June 2009; most responses were positive or neutral/no change;
- Most optimistically, only 2 percent of CEO respondents forecast a decrease in their employment for the next three months, compared to 19 percent of their counterparts at the national Business Roundtable; and,
- For the second quarter in a row, the manufacturing sector had the most optimistic outlook for expected demand, capital spending and employment.
The first graph below shows the diffusion index of overall economic outlook (Question 1 on the survey), which measure the level of confidence respondents have about different aspects of the economy, and can range from 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 derived from new methodology, which takes into account the “intensity” of replies, and differentiates between “mild” and “strong” answers and weights VBR’s employment by sector to Vermont’s employment by sector, for greater representativeness to the Vermont economy. 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 diffusion index of overall economic outlook shows in uptick from Q4 2013 to Q1 2014, indicating that Vermont CEOs feel more optimistic about the business climate in 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 last three months. The large number of neutral responses has pushed the line towards the 0.0 point on the diffusion index, indicating that the economic climate in the last three months was lukewarm.
The next survey will be conducted in early July, 2014.
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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To View CCTV Segment on the survey’s results, please visit: http://www.cctv.org/watch-tv/programs/vbrepr-business-conditions-survey-1
Lisa Ventriss, President, Vermont Business Roundtable
Amanda Wassel, Research Assistant, Economic & Policy Resources
with guest, Geoff Glaspie, Plant Manager, Husky Injection Molding.