The VBR/EPR Business Conditions Survey for the fourth quarter of 2016/first quarter of 2017 has been released. Most responses to the question about the state’s overall business climate outlook were positive (46%). The remaining responses were split between neutral (32%) and negative (22%). More than 50 percent of respondents (51%) shared negative outlooks specifically with ease of hiring for available positions, compared to 60% in the previous survey. The construction sector had the most optimistic outlook on the general business climate, while the health care sector had the least optimistic outlook. Compared to the national Business Roundtable CEO Survey, Vermont companies are predicting higher capital spending plans, and a slightly more positive employment outlook than their national counterparts.
For this reporting period, the diffusion index shows a increase in optimism from Q4 2016 to Q1 2017, indicating that Vermont CEOs continue to feel more optimistic about the business climate for the coming three months. Vermont’s outlook appears to now be on an “improvement” trend given the responses from this and the previous survey, yet continues to demonstrate that economic conditions overall remain somewhat fragile in many areas of the State and in some parts of Vermont economy.
The Business Conditions Survey is conducted in partnership between the Vermont Business Roundtable and Economic & Policy Resources. The nine question survey of the 97 members of the Vermont Business Roundtable captures a glimpse of how Vermont business leaders see the state economy. The survey asks business leaders how their businesses have fared in the recent past and how they view the future. Sentiments regarding the current and expected business climate and the expected impact on hiring and investing decisions are also surveyed. Included in the standard survey is a question asking roundtable members for opinions on a current debate in public policy. Along with providing a snapshot of the Vermont business climate, the survey allows Vermonters to see how these markers change over time.
The press release is available as a PDF below.
Forecasters participating in the Federal Reserve Bank of Philadelphia’s Livingston Survey predict improved output growth over the second half of 2016 as well as an uptick in growth into 2017. Forecasters project that real GDP (Gross Domestic Product) will grow to an annual rate of 2.7 percent in the second half of 2016 and growth of 2.2 percent in the first half of 2017 and 2.4 percent in the second half of 2017. Inflation—as indicated by the CPI (Consumer Price Index) and PPI (Producer Price Index)--are expected to rise from 1.3 percent and -1.0 percent in 2016 to 2.4 percent and 2.7 percent in 2017 respectively. Other economic indicators included in the survey are nominal GDP, nonresidential fixed investment, corporate profits after taxes, industrial production, housing starts, auto sales, average weekly earnings, prime interest rate, 3-month Treasury Bill, and S&P 500 stock price. The Philadelphia Fed’s Livingston Survey is the oldest survey of economists’ expectations and is published twice a year in June and December. Bob Chase, senior economist at EPR is a long-standing participant in the Survey.
For further information on the Survey, follow the link below.
On December 8, 2016, Jeffrey Carr of EPR presented "Comments on the 2017 Economic Outlook" at the 2016 Annual Vermont Tax Seminar at the Double Tree Conference Center in Burlington, Vermont.
A copy of his presentation is below.
After a moderate decline in October, The Conference Board Consumer Confidence Index® shot up in November 2016, from 100.8 to 107.1 (1985=100). The current level of 107.1 brings the index back to pre-recession levels and is at its highest level since July 2007. Lynn Franco, Director of Economic Indicators at the Conference Board, reported that: “A more favorable assessment of current conditions coupled with a more optimistic short-term outlook helped boost confidence. And while the majority of consumers were surveyed before the presidential election, it appears from the small sample of post-election responses that consumers’ optimism was not impacted by the outcome. With the holiday season upon us, a more confident consumer should be welcome news for retailers.” For the full statement, click the link below.
The U.S. economy continued to create jobs at a steady pace in November, according to the Bureau of Labor Statistics. Employers added 178,000 jobs in November. Job growth in October was revised to 142,000, down from initially estimated 161,000. Over the past three months, job gains have averaged 176,000 per month.
Average hourly earnings for all employees declined by 3 cents to $25.89, following an 11-cent increase in October. Over the year, average hourly earnings have risen by 2.5 percent.
The unemployment rate declined to 4.6 percent in November; its lowest rate in nine years. The unemployment rate reflects mixed underlying trends; more people are finding jobs, but over 400,000 dropped out of the labor force, reflecting an aging workforce and discouraged workers. The labor-force participation rate—those with jobs or actively seeking work, edged down to 62.7 percent in November from 62.8 percent in the prior month and continues to hover near a four-decade low.
The full BLS press release on November 2016 employment situation can be accessed in the link below:
The next employment situation report for December 2016 will be released on Friday, January 6, 2017.