A recent survey of executives with small- and medium-sized businesses in central Virginia indicates the outlook for sales and hiring over the next six months has improved from the first half of 2020, though the pace of the economic recovery seems shaky.
About 61% of chief executive officers who responded to the survey in late September and early October said they expect sales to increase over the next six months, compared with about 43% of CEOs who said they expected to see sales grow in a survey in late June.
The survey is conducted quarterly by the Virginia Council of CEOs and the University of Richmond’s Robins School of Business.
Expectations for hiring also improved, though a majority of the CEOs who took the survey still don’t expect to increase their employment soon.
Almost 40% of the business managers in the most recent survey said they expect to add employees in the next six months, compared with about 30% in June.
Confidence was particularly high among businesses in the healthcare and construction sectors, said Rich Boulger, who administers the survey as associate dean at the Robins School.
Almost 43% of the CEOs said they expect employment to remain flat.
More than 80% of CEOs expect to continue to operate without significant layoffs. Only about 13% expect layoffs, while about 6% are uncertain at this time.
The results indicate that the economy “appears to have settled into a steady growth scenario,” said Mickey Quiñones, dean of the Robins School. “However, with uncertainties surrounding the pandemic and future government stimulus, we are clearly not out of the woods yet.”
Expectations for capital spending — investments in items such as equipment for businesses — were down in the most recent survey to the one in June. Only about 14% of CEOs said they expect to capital spending to increase in the next six months, compared with about 20% in June.
“I would characterize that as an expression of cautiousness,” said Boulger.
Scot McRoberts, executive director of the Virginia Council of CEOs, said he has heard from member businesses that the pace of economic recovery is slowing.
“The lack of another round of stimulus from Congress seems to be a contributor, along with the crippling effects of the pandemic on certain sectors of the economy,” he said.
Ron Carey, the founder and chief executive officer of Tilt Creative + Production, described 2020 as a “roller coaster” year but says he is cautiously optimistic about the next six months to a year.
The Richmond-based company creates video and animation content for broadcast and online advertising and in-store presentations. Because of COVID-19, production dropped off significantly from March to June.
The company was one of thousands in the Richmond area that were able to get a federal Paycheck Protection Program loan, which helped keep its 40-person staff employed during the downturn. After the company put in place COVID-19 safety protocols, business started to recover.
“The back half of the year has improved over the March through June time frame,” Carey said,.
“For us, so much of that is because we work in the retail space, we work in the financial sector and in the automotive sector,” he said. “The retail space in particular — both online and physically in stores — has picked up, because so many people are shopping in a different ways.”
Carey said he thinks Congress should pass a “targeted” stimulus package aimed at helping those most affected by the pandemic.
Sixty-three CEOs responded to the survey, which was administered Sept. 28 through Oct. 5. Multiple industries are represented in the sample, including construction, manufacturing, finance, insurance, and retail.
The average company whose CEO responded to this survey had about $15.6 million in revenue for the most recent 12-month period. The average employment was about 71.