Utah execs' optimism waned in Q4, but they stay positive

Utah execs' optimism waned in Q4, but they stay positive
Economy » Business leaders are guarded, but some see signs of recovery

By Paul Beebe, The Salt Lake Tribune
Updated: 03/13/2009 04:22:22 PM MDT

Optimism among Utah executives about the financial futures of their companies is ebbing, but has not collapsed, despite declining economic conditions in the country.

"Lets call it guarded. Nothing has fallen off the cliff," said Julie Olsen, a research analyst for Dan Jones and Associates, which produced the latest quarterly economic forecast for Zions Bank.

"Because of everything you hear going on in the media, you have to be blind not to know that something is going on, but people are not ready to throw in the towel," Olsen said.

The study tries to gauge the health of Utah's economy from the perspective of high-level executives across the state. Their optimism about the future of their firms was measured at 5.86 in the last quarter of 2008, down from 6.13 in the third quarter. Optimism is measured on a scale of 1 to 10.

Olsen said respondents impart several meanings to "financial future." The term could mean anticipated earnings, financial stability or cash flow, among other things.

The U.S. economy is in the 15th month of a recession that shows no sign yet of recovery. In Utah, business conditions have weakened considerably, but are healthier than much of the country.

In fact, some businesses even sense that the worst may be over.

"I am sensing in the daily activity we are getting reasonably close to where things are flattening out," said W. David Smith, general manager of the Salt Lake division of XpedX, a
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wholesale distributor of paper, packaging and facilities maintenance supplies.

"I just see that in the requests for quotes and deliveries going out. It's not at the levels that we would like and certainly down compared to levels a year ago. But it looks like the trend is flattening and not trending down," Smith said.

Still, the survey shows executives are cautious about prospects for their companies in coming months.

Capital spending weakened further in the fourth quarter. Just 10 percent of respondents said their spending on equipment and other assets increased in the final three months of last year, marking the lowest level since the survey began in mid-2006, and down from 17 percent in the third quarter.

Utah executives were more pessimistic about hiring in the fourth quarter than at any time before. Thirty seven percent said employment was likely to decrease in the quarter, up from 26 percent in the previous three months of last year.

pbeebe@sltrib.com