Business leaders’ confidence dips but still positive

Monday, July 2, 2012

The third quarter 2012 Charlotte Business Confidence Index report, released July 2, shows Mecklenburg County business leaders’ optimism about economic prospects declined compared to their expectations for the second quarter of 2012. The overall index value of 55.4, a decrease of 3.4 points compared to the second quarter, remains positive on business confidence overall, with the index above 50 for a third consecutive quarter, but posting the first decline since the fourth quarter 2011 (index values higher than 50 indicate positive 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 third quarter 2012, took place the first two weeks of June.

The results of the third quarter survey show that business leaders again have a slightly negative outlook on the national economy after one quarter of positive expectations. The survey recorded positive expectations for five of the six component questions that contribute to the overall index. As the table shows, all but one of the third quarter index values posted a decrease, hiring expectations increased by 2.7 points.  The national economic outlook index recorded a value of 49.5, representing the largest decrease among all index values, decreasing 8.5 points from the second quarter. 

With an index value of 56.1, 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 59.2.  Following close with the sales index value, their outlook on hiring is also positive, with an index value of 57.7.  Profits and capital expenditures both reported positive index values of 55.6 and 54.6, 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. The next survey for the fourth quarter 2012 will take place the first two weeks of September.

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. 

To see a copy of the full report from the third 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.

To read the 2012 third quarter report: Download PDF

Jonathan Kozar