Charlotte economic outlook improves for first quarter

The first quarter 2013 Charlotte Business Confidence Index report, released Jan. 2, shows Mecklenburg County business leaders’ optimism about economic prospects in the first quarter 2013 improved compared to their expectations for the fourth quarter 2012. The overall index value of 54.2, an increase of 1.8 points compared to the fourth quarter 2012, represents improved optimism for the first time since the second quarter of 2012.

Index values higher than 50 indicate positive expectations; values less than 50 indicate negative expectations. The index provides an early indicator of future economic activity in Mecklenburg County by surveying business leaders about national and local economic expectations as well as their company’s expectations regarding sales, profits, hiring and capital spending. The survey, asking about expectations for the first quarter 2013, took place the first two weeks of December.

The index is a collaborative effort between the Charlotte Works and the City of Charlotte, with research and analysis by the UNC Charlotte Urban Institute. Modeled after successful confidence index initiatives in Colorado and Alabama, the Charlotte Business Confidence Index helps city leaders plan for economic development initiatives and provide forward-looking data concerning possible business expansion or contraction.

The results of the first quarter survey show that business leaders continue to have a negative outlook on the national economy with national expectations declining another 1.5 points from the fourth quarter 2012 to first quarter 2013. The survey recorded positive expectations for four of the six component questions that contribute to the overall index. As the table shows, all but two of the first quarter index values posted an increase. The profits index recorded a value of 58.7, representing the largest increase among all index values, increasing 4.6 points from the fourth quarter 2012.

With an index value of 56.5, business leaders continue to be confident about the local economy more so than the national economy. Business leaders have the highest expectations for sales, with a sales index value of 59.8. Profits and hiring expectations both reported positive index values of 58.7 and 56.0, respectively. With an index value of 47.8, capital expenditures recorded a negative index value for the second consecutive quarter.

Participation in the index is open to all businesses in Mecklenburg County, who must first register to receive quarterly invitations to complete the survey. For classification and verification purposes, the registration asks for company information concerning business type, revenue and employment size.

To see a copy of the full report from the first quarter, click the link below. For more information about the Charlotte Business Confidence Index, its methodology and how business leaders can register to participate, go to www.ui.charlotte.edu/businessconfidence.