story by Roby Brock, a TCW content partner and owner of Talk Business & Politics
The latest survey of more than 150 Arkansas company leaders indicates an improved outlook for the rest of 2014 on the sales and hiring front, as well as expectations that economic conditions will improve in the last half of the year.
Talk Business & Politics — in conjunction with the Arkansas State Chamber of Commerce and consulting group CEG Partners – released its second “Business Leaders Confidence Survey,” which captures opinions on the future direction of Arkansas economic conditions. The Greater Little Rock Chamber of Commerce also aided in this latest survey.
“There is a lot of good news from this survey and nationally, but it’s kind of like pedaling a bike in the Ozarks. As soon as you make it over one hill, there seems to be another one in front of you,” said Mike Stafford, managing partner with Little Rock-based CEG Partners, which conducted and analyzed the mid-year report.
CEG Partners received results from 154 state business leaders representing top executives in all major industry categories, such as manufacturing, health care, finance, energy, construction and utilities.
Some key takeaways:
• 69% of respondents expect sales and revenues to increase slightly or significantly during the next 6 months – an 8% improvement from January 2014.
• 49% expect hiring to increase slightly or significantly – a 23% improvement from the number we saw in our last survey 6 months ago.
• 47% said economic conditions are better today than 6 months ago – an 88% improvement from our last survey.
• 51% said they expect conditions to improve in the next 6 months – a 46% improvement from six months ago.
“There’s no question that the economy, at long last, in this now five-year old recovery seems to be getting some legs, so this is good news,” said Randy Zook, CEO of the Arkansas State Chamber of Commerce and Associated Industries of Arkansas.
There was one negative highlight in the report related to capital spending. Despite the optimism for employment, revenue increases and the overall economy, business leaders are still cautious regarding capital expenditures. About 51% of business leaders surveyed expect capital spending to increase in the second half of 2014, a 2% decline from 6 months ago.
Stafford said capital expenditures remain a long-term investment, and presently, there is still lingering uncertainty for the long-run even though short-term conditions look positive.
Zook added there is still a lot of “slack capacity” in industry statewide and nationally, which could explain the hesitation in this category.
The results of the Business Leaders Confidence Survey are a contrast to Arkansas consumer opinion on business conditions. The recently released Arvest Consumer Sentiment Survey found only 22% of Arkansas consumers expect business conditions to be more favorable one year from now, mainly because of concerns regarding unemployment.