Charlotte Business Confidence Index
The third quarter Charlotte Business Confidence Index report, released July 1, shows Mecklenburg County business leaders slightly optimistic about economic prospects in the third quarter. The overall index value of 55.0, though, is a decline of 7.3 points compared to the second quarter. Index values higher than 50 indicate positive expectations; values less than 50 show 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 third quarter 2011, took place the first two weeks of June.
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 third quarter survey show that business leaders remain positive in their economic outlook, especially regarding the local economy, but that their outlook is a little less upbeat than it was heading into the second quarter of the year. The survey recorded positive expectations for five of the six component questions that contribute to the overall index. But as the table shows, all the third-quarter index values posted a decline. The national economic outlook index value of 47.6 was the only index value below 50 (negative expectations), and the largest decline among all index values, dropping 12.6 points from the second quarter.
With a local economic outlook index value of 53.7, business leaders appear a little more upbeat about the local economy than the national economy. Business leaders have the highest expectations for sales, with a sales index value of 62.8. While not as high as the sales index value, their outlook on profits and hiring is also positive, with index values of 59.1 and 55.1, respectively.
Capital expenditures narrowly reported a positive outlook, with a capital expenditures index value of 51.7.
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 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.uncc.edu/businessconfidence. The next quarterly survey asking about expectations for fourth quarter 2011 will take place the first two weeks of September, with the report to be released at the end of September.
To read the 2011 third quarter report: Download PDF
Photograph by Nancy Pierce
