SURVEY SAYS

VIRGINIA ECONOMIC EXPECTATIONS OUTLOOK SURVEY >>

More work to do for economic recovery

The U.S. economy is making incremental

progress, according to the VSCPA members who responded to the Society’s 2016 Virginia Economic Expectations Survey, a partnership with Virginia Business magazine (which is doing its own breakdown of the survey in its November issue).

In the 2015 survey, respondents were deadlocked at an even 50-50 split on the question, “Do you believe the United States is in a sustained economic recovery?” This year, the “Yes” votes had it with a 53 percent — 47 percent advantage. But it wasn’t all roses, as a plurality of respondents (42 percent) indicated that a full economic recovery would take more than four years, while only 10 percent said the recovery would be finished in less than two years.

The VSCPA and Virginia Business held a panel discussion at the CPA Center in Glen Allen on Sept. 10, with four VSCPA members, representing the state’s four largest metropolitan areas, on the panel:

>> Jennifer Duff, CPA, CFO of Management Stack LLC in Salem (Roanoke area)

>> Mike Gracik, CPA, managing partner at Keiter in Glen Allen (Richmond area)

>> Jim Haggard, CPA, partner at Dixon Hughes Goodman in

Newport News (Tidewater)

>> John Renner, CPA, principal at Renner & Co. in Alexandria (Northern Virginia)

Watch the panel discussion at vscpa.com/EconomicExpectationsPanel.

The 307 respondents ranked infrastructure as the most pressing issue for Virginia, with 23 percent going with that choice. Health care costs, government regulation, education and federal budget cuts all picked up at least 13 percent of the vote.

Infrastructure and health care costs have been the top two issues on the survey since 2014, although those issues swapped places this year.

Health care could remain an issue moving forward, with the Affordable Care Act (ACA) employee mandate kicking in for companies with 50 or more employees. Sixty-three percent of respondents cited health care costs as the top financial problem for Virginia businesses.

“We do expect the problems to be worse next year,” Gracik said, “partly due to the mandate and partly with what you see with rising costs for all insurers.”

Two-thirds of respondents said the ACA is hurting the U.S. economy. Respondents were split on the best way to move forward, with 55 percent favoring reforming the law and 45 percent favoring repeal. Just one-third of respondents said Virginia should accept federal dollars for Medicaid expansion.

Virginia CPAs were in agreement on several other issues:

>> An independent, bipartisan commission should be designated to redistrict state legislative and Congressional seats in Virginia (66 percent)

>> Support for the Atlantic Coast Pipeline through Virginia (72 percent)

>> There is an adequate talent supply to replenish the Virginia workforce (71 percent)

>> The region has not done enough to lessen its dependence on federal spending (84 percent)

Nine out of 10 respondents said their company anticipated increasing or maintaining revenues in comparison to 2015, with 64 percent anticipating revenue growth for their firm. n

Economy savvy: VSCPA members Jennifer Duff, CPA, and Mike Gracik, CPA, take questions during the VSCPA’s 2016 Virginia Economic Expectations Survey panel discussion on Sept. 10. Visit vscpa.com/EconomicExpectationsPanel to watch the discussion or visit this page in the digital edition at disclosures.vscpa.com.