Eighty-four percent of Virginia’s CEOs are experiencing a negative impact on their business due to inflation, according to the quarterly CEO Economic Outlook Survey conducted by the University of Richmond’s Robins School of Business and the Virginia Council of CEOs.
According to the survey, in addition to the current impact of inflation, 55% of the commonwealth’s CEOs expect inflation to continue to rise above current levels over the next six months.
“The survey results suggest that CEOs have felt a considerable negative impact from inflationary pressures and, as a result, are less optimistic overall about the next six months,” said Rich Boulger, associate dean at the Robins School, which administers the survey and collects the responses.
“It is no surprise that inflation is hurting small businesses,” said Scot McRoberts, executive director of VACEOs. “The entrepreneurs I work with continue to adapt to challenging conditions, but I have seen their optimism dim in recent months.”
Fifty-nine percent of the commonwealth’s CEOs expect sales to increase with 28% expecting at least a 10% increase, while 52% expect employment to increase over the next six months.
The survey found expectations over the next six months for both sales and employment were positive, although expectations were down compared with the end of Q1 2022.
More than half (59%) of the surveyed CEOs indicated that they expect sales to increase over the next six months.
6% expected sales to be “significantly higher.” 53% expected sales to be “higher.” 13% expected sales to be “lower.” 28% indicated they expected no change.
Thirty-one percent of the CEOs expect capital spending to increase over the next six months (similar to last quarter) while 25% expect capital spending to decrease. More than 43% of those surveyed expect capital spending to remain flat.
Fifty-two percent of respondent CEOs expect employment to increase over the next six months. Thirty-eight per cent expect employment to remain flat while only 11% expect employment to fall.
Taken as a whole, the results pertaining to sales, capital spending, and employment are less positive than in the first quarter of 2022 with the overall Economic Outlook Index decreasing (81.3 versus 98.1) relative to the results from the end of Q1 2022.
Additionally, CEOs were again asked if the war in Ukraine and other world events have resulted in supply chain interruptions that negatively impacted their business. They reported the following impact on their business:
No impact: 33%. A minor negative impact: 43%. A significant negative impact: 24%.