Decreased Workforces, Expenditures Predicted by Utah Execs in Latest Zions Bank Quarterly Economic Forecast

UtahPulse.com
March 10, 2009

As optimism for their financial future continues to decline, more Utah executives are predicting decreases in their workforces and fewer capital expenditures, according to Zions Bank's Utah Quarterly Economic Forecast. More panelists than ever anticipate the economic health of their companies will be weaker in the future, according to the bank's fourth quarter 2008 survey results.

Conducted by independent research firm, Dan Jones & Associates, the survey has gauged the health of Utah's economy from the perspective of high-level executives throughout the state since second quarter 2006.

Executives' optimism regarding the financial futures of their companies based on the previous quarter has declined from a mean score of 7.87 two-and-a-half-years ago to the fourth quarter 2008 rank of 5.86 on a scale of 1-10, with 1 being very pessimistic and 10 being very optimistic. The latest survey, conducted January 5 through 27, reveals that just one in 10 Utah executives rate their outlook as a 9 or 10, down from one-third in the second quarter 2006.

"Even with this harbinger of hard times ahead, Utah executives report less concern, collectively, about individual economic factors," said Pat Jones, co-owner of Dan Jones & Associates. "In fact, of the 11 economic factors measured by executives each quarter, only two reach their highest level of concern in the current quarter, and six are actually at their lowest levels of intensity."

The full 30-page report of the fourth quarter 2009 Zions Bank Utah Quarterly Economic Forecast can be viewed here. Following are additional highlights from the latest study:

* Over the two-and-a-half-year period of the study, predictions for their companies' economic health in the upcoming quarter have steadily fallen. In the summer of 2006, half of the panelists thought the economic health of their companies would improve. Now less than one in five panelists think so.
* Anticipated capital spending in the next quarter is down by a similar margin: from 30 percent predicting somewhat or much more spending to 10 percent today.
* Utah business executives are now more likely than in any previous quarter to say they foresee their workforces decreasing somewhat or greatly in the next quarter, up from nine percent two-and-half years ago to 37 percent now.
* Seemingly more focused on the economic "big picture," executives are less concerned about individual economic factors than they have been throughout the course of this study. Each quarter 11 economic factors are measured on a 7-point scale, with 1 being not at all concerned to 7 being very concerned.
* Just two factors reach their highest levels of concern this quarter: first, the ability to compete in the marketplace, with almost one-quarter saying they are greatly concerned (the previous high was 19 percent in the second quarter 2008); and second, the cost of the lease, rent, or mortgage up to 10 percent from the previous high of 8 percent in the third quarter of 2008.
* Concern for the majority of the economic factors is currently at its lowest level. The cost of employee health insurance--the number one concern this quarter--is down from its previous high of 63 percent in the third quarter of 2007 to 48 percent today.

In 2006, 1,169 business executives were recruited to form the study panel and to complete quarterly surveys. Business owners and high-level executives are still needed to join the panel and share their confidential views on the economy. Those interested in joining the panel may learn more information at https://utaheconomicforecast.com.