Survey finds uptick in business optimism
The first quarter 2012 Charlotte Business Confidence Index report, released Jan. 3, shows Mecklenburg County business leaders’ optimism about economic prospects in the first quarter improved compared to their expectations for the fourth quarter 2011. The overall index value of 54.6, an increase of 8.3 points compared to the fourth quarter, returned to a positive outlook on business confidence, after posting negative expectations for the first time in the fourth quarter.
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 2012, took place the first two weeks of December.
The index is a collaborative effort between the Charlotte-Mecklenburg Workforce Development Board 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 have continued their negative outlook on the national economy for the third straight quarter but renewed a positive outlook on local economic expectations. The survey recorded positive expectations for five of the six component questions that contribute to the overall index. As the table shows, all the first quarter index values posted an increase. The local economic outlook index recorded a value of 53.3, representing the largest increase among all index values, increasing 12.5 points from the fourth quarter.
The index value of 46.7 indicates that business leaders are least confident about the national economy. Business leaders have the highest expectations for sales, with a sales index value of 61.8. Following closely with the sales index value, their outlook on profits is also positive, with an index value of 57.5. Hiring and capital expenditures reported positive index values of 56.6 and 51.9, respectively.
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 read the full report, 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 ui.charlotte.edu/businessconfidence.
To read the 2012 first quarter report: Download PDF
Photograph by Nancy Pierce.