Utah business owners anticipate recovery from the effects of the recession will be slow, according to Zions Bank’s latest Utah Quarterly Economic Forecast. The second quarter 2009 study reveals 52 percent of Utah executives say it will take their companies at least one year to bounce back. Another 31 percent of Utah business leaders predict it will take six-to-12 months to recover, and just eight percent believe it can be done in less than six months.
Conducted by independent research firm Dan Jones & Associates, the study has gauged the health of Utah’s economy from the perspective of high-level executives throughout the state since second quarter 2006.
Reflecting the uncertainty of the current economy, Utah business leaders are not as optimistic about the financial futures of their companies as they were last quarter, based on profits and losses from the preceding three months. Using a 10-point scale (with 1 indicating “very pessimistic” and 10 “very optimistic”), the current mean score of 6.11 reveals a marginally optimistic outlook, slightly less optimistic than 2009 first quarter’s 6.22. But the score is still improved from the fourth quarter of 2008, when panelists reported their lowest level of optimism at 5.86.
“The good news is that most executives report more optimism about the long-term futures of their companies,” said Pat Jones, co-owner of Dan Jones & Associates. “More than three-quarters of business leaders, or 77 percent, feel optimistic about the long-term outlook, but if they are limited to basing their outlook only on the last quarter, that percentage drops to 63 percent.”
When asked what adjustments their companies have had to make to cope with the economic downturn, 31 percent of panelists mentioned first that they have either reduced the size of their workforce or ceased hiring any new employees. The study also features executives’ candid comments on their strategies for adjusting to the recession. “We reduced labor hours from 40 hours a week to 32 hours a week. This allowed us to keep valued employees, rather than letting some go,” noted one panelist.
The full 42-page report of the second quarter 2009 Zions Bank Utah Quarterly Economic Forecast can be viewed at utaheconomicforecast.com. Following are additional highlights from the latest study:
• Nearly three out of five executives, or 58 percent, forecast that their companies’ workforces will remain about the same size in the next three months compared to the previous quarter.
• As the study has consistently reflected since its inception, a plurality of executives — 47 percent in the second quarter 2009 — predict their companies’ economic health will be about the same next quarter as it was last quarter.
• Fifty-four percent of Utah executives rate their level of concern about the cost of employee health insurance as a 6 or 7, measured on a 7-point scale (with 1 indicating “not at all concerned” and 7 “very concerned”). Panelists in companies with fewer than 51 employees and older executives are more likely to rate their concern over the cost of employee health insurance as a 6 or a 7.
In 2006, 1,169 business executives were recruited to form the study panel and to complete quarterly surveys. Business owners and high-level executives may join the panel to share their confidential views on the economy. More information is at utaheconomicforecast.com.
Source: Press Release, dated 3 September 2009.
