Utah economy better than most, executives say

Utah economy better than most, executives say

By Jasen Lee
Deseret News
Wednesday, March 3, 2010

SALT LAKE CITY — Most Utah business leaders believe the state's economy is faring better than the rest of the nation, according to a report released this week.

The Zions Bank Utah Quarterly Economic Forecast indicated that during the fourth quarter of last year, 65 percent of panelists said Utah's economy is "somewhat better" and 8 percent believe it is "much better" than other states.

Results from the survey showed that 70 percent of executives could point to specific signs they have observed in their companies that show the economy is turning around.

"Momentum seems to be building in the business community," one panelist said. "We see increased interest in products that haven't been popular since the recession started."

Another panelist stated, "We are increasing capital expenditures, advertising and staffing."

Business leaders also report a relatively steady level of optimism about the financial futures of their companies. Using a 10-point scale (with 1 indicating "very pessimistic" and 10 "very optimistic"), the current quarter's mean score of 6.36 reflects a "slightly optimistic" viewpoint among executives, the report said.

The 40-page report was conducted by Salt Lake City-based independent research firm Dan Jones & Associates.
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In 2006, 1,169 business executives were recruited to form the study panel and to complete quarterly surveys. Subsequently, other business owners and high-level executives have been allowed to join the panel to share their confidential views on the economy.

"Although the majority of Utah business leaders feel the economy is stronger in Utah than in the rest of the nation, they do not concede that the current economic crisis is over for their company," Pat Jones, co-owner of Dan Jones & Associates, said in a news release. "But on the bright side, predictions for increases in work forces are at their highest level since the beginning of 2008."

The report said that throughout 2009 and specifically in the fourth quarter, 37 percent of Utah business leaders said their companies' economic health would be "better" in the upcoming quarter, compared to 21 percent who predicted it would be worse.

Additionally, for the first time since the second quarter of 2008, a higher percentage of Utah executives — 29 percent — anticipate their work forces will increase in the upcoming quarter, compared to 21 percent who believe their work forces will decline.

But the highest percentage of panelists — 49 percent —said the size of their work forces would stay the same.

A survey showed that 36 percent of executives indicate that if they need to make budget cuts in their companies, cutting low-level employees would be their first option, while 25 percent would reduce salaries first and 24 percent would slice employee benefits.

For the fifth consecutive quarter, employee health insurance costs were the top concern among Utah executives, followed by the impact of inflation on business expenses, salaries and wages, followed by gasoline prices.

e-mail: jlee@desnews.com