Quarterly Outlook of Triangle Entrepreneurs (QuOTE) shows ambiguity from quarter to quarter

The Quarterly Outlook of Triangle Entrepreneurs (QuOTE) survey for the third quarter of 2016 finds entrepreneurs are viewing the next six months a bit more optimistically in comparison to Q2 survey responses.

A slightly lower percentage of Q3 2016 survey participants, 81.3% (vs. 82.4% in Q2 2016), report that they anticipate the next six months may bring increases in sales. In terms of capital spending, a higher percentage, 56.8% (vs. 45.7%), anticipate increases; for employment, 58.8% (vs. 56.1%) anticipate increases.

These data suggest that optimism in terms of sales is basically flat while capital spending and employment growth is higher. Aligned with this premise is a rise in the outlook index to 110.70 (from 103.80 in Q2).

“That level of the outlook index is similar to what we saw in Q1 2016,” said Lewis Sheats, senior lecturer in entrepreneurship at the NC State Poole College of Management and director of the NC State Entrepreneurship Clinic. “This level of fluctuation is interesting; it suggests that from quarter to quarter, entrepreneurs are experiencing more instability than we’d like. It will be interesting to see what the fourth quarter reveals.”

Sheats and Jeff Pollack, an assistant professor in entrepreneurship at Poole College, conduct the quarterly survey. The City of Raleigh recently joined the project as a collaborator.

“Perhaps as the complexity of the political environment sorts itself out, local entrepreneurs will be able to more effectively anticipate the near future for their firms. Ideally, what we would experience is a consistent trend that would inform us on what steps community leaders can take to better the landscape for entrepreneurs. We can make changes based on a positive upward trend and we can adjust for a negative downward trend. The ambiguity we’re seeing from quarter to quarter is not optimal,” Sheats said.

Pollack adapted the survey and analyzes the quarterly data based on the Business Roundtable, an association of CEOs of American companies that conducts a similar survey nationally with large companies.

“The QuOTE survey is one more great example of the importance of a continued partnership between NC State and the City of Raleigh,” said Derrick Minor, Innovation & Entrepreneurship Manager for the City of Raleigh. “Our role within the Office of Economic Development and Innovation is to assist startups, small businesses, and mid- to large-sized companies who are looking to create jobs and invest within our local economy. Collaboration on the QuOTE survey helps us to keep a pulse on how those companies are forecasting the next six months.”

“The QuOTE survey is one of many examples of NC State’s and the Poole College of Management’s commitment to advancing economic and societal prosperity,” said Annette Ranft, dean and Stephen P. Zelnak Jr. Chair at the Poole College of Management. “We welcome the City of Raleigh’s collaboration with the NC State Entrepreneurship Clinic on this quarterly survey and other clinic activities.”

Following are projections for the next six months for sales, spending and employment, based on the Q3 2016 QuOTE survey results.

The QuOTE results also provide an overall entrepreneurs’ economic outlook index, which is based on businesses’ projected six-month sales, capital spending, and employment figures. Over time, trends in this index can be viewed as indicating general optimism or pessimism about entrepreneurship in the Triangle.

A full report on the findings is available online at http://entrepreneurshipclinic.ncsu.edu/clinic-research/

The QuOTE survey team is planning to expand the survey. Triangle entrepreneurs who would like to participate are asked to submit their name, business name and email address to TheEClinic@ncsu.edu. Participation is free and responses are confidential.