Wall Street Journal/Vistage Small Business CEO Survey: Mixed sentiments from CEOs
CEOs expressed mixed sentiments in the most recent Wall Street Journal/Vistage Small Business CEO Survey.
On the one hand, economic confidence among small business CEOs remained largely unchanged. According to the May 2017 survey, the Wall Street Journal/Vistage Small Business Confidence Index stood at 110.9, a figure nearly identical to the six-month average of 110.8.
However, economic optimism has been gradually decreasing since the start of the year, when the index measured 113.5, and is now at its lowest point for 2017. According to Dr. Richard Curtin of the University of Michigan, “most of the small May decline was in evaluations of the national economy, which is not surprising given the dismal 1st quarter GDP data. Perhaps more surprising is the strength that has been maintained in plans for future increases in their workforce, fixed investments, revenues and profits.”
Other results from the survey include the following.
Declining optimism in economic outlook
In the May 2017 survey, 52% of small firms reported that the economy had improved during the last year—a four percent decline compared to last month. CEOs also expressed a slightly less optimistic outlook on the economy than in months past, with 47% anticipating improved conditions compared to 60% in January. However, this figure is still more than double the 20% reported in May 2016.
Positive outlook for revenue increases and profit gains
Similar to last month, about three out of four small firms reported that they expected higher profits in the year ahead. Similarly, about six out of 10 firms said they anticipated higher profits. Only one out of 10 firms reported that they expected revenues or profits to decline.
Plans for hiring and investing remain steady
Capital investments and employment plans remain unchanged among small firms. Forty-seven percent of small firms say they plan to increase their fixed investment spending this year (consistent with the six-month range of 47-49%), while 62% of firms expressed plans to increase their workforces (consistent with the six-month range of 59-62%).