Updated Jul. 25, 2017 at 1:30 p.m.

Fewer Triangle entrepreneurs plan to boost hiring, capital spending

Published: 2017-07-25 11:57:00
Updated: 2017-07-25 13:30:01

Economy Economy

Entrepreneurs are slightly less enthusiastic about the state of business heading into the third quarter of 2017, according to a new survey.

The score for the economy as calculated by the Quarterly Outlook of Triangle Entrepreneurs dipped slightly from the second quarter to 114.0 from 116.3. It's also lower than expectations for the first quarter of 2017 at 117.0 but is still higher than the six quarterly scores calculated ahead of 2017. The survey focuses on what entrepreneurs see likely to occur over the next six months.

The latest score nearly matches that of the first survey taken in late 2014 (113.67).

The entrepreneurs' attitude contrasts sharply with overall U.S. consumer confidence.

U.S. consumers gained confidence this month, with more Americans pleased by current conditions and more hopeful about the future, the Associated Press reported Tuesday.

The Conference Board, a New York-based business research group, says its consumer confidence index in July rose to 121.1, up from a revised reading of 117.3 in June. Consumers' views on current conditions hit the highest level since July 2001, while expectations for the future rebounded after a slight dip in June.

Economists say the strong readings on consumer confidence are being bolstered by a healthy job market, with unemployment at a low 4.4 percent in June.

Inside the Triangle survey

Highest score to date om the Triangle survey was for the second quarter 2015 at 121.83.

Driving the score down were slight dips in plans for hiring and for capital spending.

Just over half (52.6 percent) of entrepreneurs expect to up capital spending vs. nearly 59 percent last quarter.

Hiring expansion fell to 60.5 percent from 65.6 percent.

However, entrepreneurs do expect their sales to improve over the next six months, 85.4 percent vs. the previous quarter's 84.9 percent.

The director of the survey, however, focused on what he sees as a move toward "no change" among survey respondents.

“What is intriguing about these data ... is that we are seeing a gravitation to the ‘no change’ category,” said Lewis Sheats, associate professor of practice in entrepreneurship in the North Carolina State University Poole College of Management and executive director of the NC State Entrepreneurship Clinic. (The Clinic, the City of Raleigh and NCSU's Poole College manage the survey.)

“Across all three areas – sales, capital spending and employment growth – greater percentages of entrepreneurs are anticipating no change. In sales, 13.9 percent vs. 11.9 percent (in Q2 2017) are anticipating no change. For capital spending, we see a similar trend (43.8 percent vs. 36.5 percent) and we see this also in anticipated employment growth (37.3 percent vs. 32.1 percent),” Sheats explained “These data suggest a consistency, or perhaps a leveling out of these numbers. This is supported by the outlook index which dropped just slightly."

The survey organizers note that Jeff Pollack, an assistant professor in the NC State Poole College of Management, "adapted the survey, and analyzed the data, based on the Business Roundtable, an association of CEOs of American companies that conducts a similar survey nationally with large companies."

The latest and previous quartertly scores:

  • Q3 2017 - 114.00
  • Q2 2017 - 116.30
  • Q1 2017 - 117.07
  • Q4 2016 - 108.47
  • Q3 2016 - 110.70
  • Q2 2016 - 103.80
  • Q1 2016 - 110.77
  • Q4 2015 - 103.93
  • Q3 2015 - 107.80
  • Q2 2015 - 121.83
  • Q1 2015 - 117.68
  • Q4 2014- 113.67

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