Utah Quarterly Economic Forecast

Transcription

1 Utah Quarterly Economic Forecast 00 nd Quarter Summary August 00 Measuring the health of Utah s economy from the perspective of the business leaders throughout the state. Conducted by Salt Lake City, UT 80-- Sponsored by For more information or to join the panel: UtahEconomicForecast.com or Support@UtahEconomicForecast.com

2 Utah Quarterly Economic Forecast Q0: Methodology Introduction Zions Bank commissioned Dan Jones & Associates, Inc., a fullservice, independent, public opinion and market research firm in Salt Lake City, Utah, to conduct and compile an online quarterly research study of business executives and key decision makers throughout the state of Utah. Research Objectives This research is designed to gauge the health of Utah s economic landscape and reveal trends in the Utah marketplace. It is designed to be an insider s view of Utah s economy, by Utah executives for Utah executives. This study does not attempt to measure financial indicators, but rather to assess how Utah executives are dealing with the economy and how they see it affecting their companies' economic decisions in the upcoming quarter. Procedures Dan Jones & Associates developed the questionnaire with Rob Brough, Executive Vice President at Zions Bank. To meet the research objectives,,9 Utah business executives and key decision makers were recruited to form the initial study panel. To better understand how our ever-changing economy is affecting the attitudes of business leaders in Utah, supplemental questions unique to each quarter have been added to the core of questions that are measured in every survey cycle. Sample Statewide, lists of Utah businesses were used to develop the survey universe. During the summer of 00, executives from randomly-selected businesses were asked to join the study panel. Additional panelists were recruited at Zions Bank s International Trade and Business Conference (May 00) and by invitation to Zions Bank's business customers (April 009). Panelists were screened to ensure that all executives have at least 0 full-time employees in their companies. Fieldwork Surveys are completed using a secure Website. Each executive is provided a unique link to the site via . To date, there have been survey cycles. To achieve adequate sample levels, panelists who did not respond to the online study were randomly selected to complete the interview by telephone. Total sample (online and telephone) Cycle st Quarter -- nd Quarter 8 rd Quarter th Quarter 0 9 Portion who completed the study by telephone Cycle st Quarter -- nd Quarter rd Quarter th Quarter Dan Jones & Associates

3 Utah Quarterly Economic Forecast Q0: Methodology Panelist Privacy Contact information is used by Dan Jones & Associates only to facilitate participation in this study and will never be shared with any other party or used for any other purpose. To assure panelist anonymity, Dan Jones & Associates collects, compiles, analyzes, and tests all data. Results are provided to Zions Bank, panel members, and the media in aggregate form only. Demographic data is collected to determine opinions of subgroups and to tabulate the data. Data Analysis Where applicable, checkmarks ( ) highlight statistically significant findings of demographic groups. Due to rounding, response distribution may not always total. 00 Dan Jones & Associates

4 Utah Quarterly Economic Forecast Q0: Key Findings Key Findings Optimism is Slightly Lower than Last Quarter Executives outlooks regarding the financial futures of their companies remain guarded, and are even down slightly this quarter (.8, on a 0-point scale with meaning very pessimistic and 0 very optimistic ) after trending towards more optimistic for the preceding five quarters from.8 in the fourth quarter of 008 to. in the first quarter of 00. % % Using a 0 scale, please rate your level of optimism/ pessimism about the financial future of your company, based on profits/losses these past three months: Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Very optimistic Optimistic (ratings of 8 0) Mid range (ratings of ) Pessimistic (ratings of ) This quarter, three out of ten executives () classify their outlook as optimistic (ratings of 8, 9, or 0). That is less than half the amount who felt the same as when optimism was at its highest in 00 (Q0: % and Q0: %), but nine percentage points higher than when optimism was at its lowest (Q08: %). Overall that is a range of percentage points on the optimistic side of the scale. 9 8 Very pessimistic On the pessimistic side of the scale, the range is much smaller that is to say that pessimism has not grown at the same rate as optimism s decline. Seven percent of Utah execs currently report a pessimistic outlook (ratings of,, or ), compared to % in the third and fourth quarters of 008 and % in the second and fourth quarters of 00, giving pessimism a range of percentage points. Economic Health Predictions Lower Than Last Quarter Thirty-eight percent predict their companies economic health will be somewhat or much better in the upcoming quarter, eight percentage points lower than last quarter (Q0: %), but 0 percentage points higher than the low of 8% in Q08. By comparison, % anticipate their companies economic health will be somewhat or much worse next quarter. That percentage is lower than it has been for seven out of the last eight quarters, and indeed much improved from the third quarter of 008, when % felt their companies economic health would be worse in the upcoming quarter. Capital Spending Still Tight Collectively, predictions of anticipated capital spending are marginally lower this quarter than last, with predicting their company will spend somewhat or much less in the upcoming quarter than they did in the previous one. Last quarter 8% said the same. Moreover, 9% currently predict they will spend somewhat or much more, down five percentage points from last quarter (Q0: %). But the majority (%) predict their spending will be the same this quarter as it was last. 00 Dan Jones & Associates

5 Utah Quarterly Economic Forecast Q0: Key Findings Workforces Not Predicted to Increase Substantially Although overall, a higher percentage (%) predict their workforce will increase in the next quarter than predict it will decrease (8%), this marks the first quarter that no executives () have made a prediction their workforce will increase greatly. However, only % predict it will decrease greatly. As they have throughout most of this study, a majority of Utah executives (%) continue to say the size of their workforce is likely to remain the same in the upcoming quarter. Business Slightly Up Compared to One Year Ago A smaller number of executives say that business in the second quarter of 00 is up substantially (9%) compared to the second quarter of 009 than say it is down substantially (%). However when comparing all up and down results (including both marginally and substantially), a greater number report that business is up (%) in 00 compared to last year than say it is down (%). National and Global Events Resonate Locally % % % % 9% Down substantially Impact of Recent National and Global Events on Utah's Economic Recovery % % % % Not at all Not very Neutral Somewhat Business in 00 Second Quarter compared to 009 Second Quarter Down marginally Very About the same Up marginally Seven out of nine Utah executives say they are somewhat (%) or very (%) about the potential impact from recent events outside of state borders on Utah s economic recovery events such as political upheaval relative to incumbents, stock market pullback, troubles in Europe, and the Gulf oil spill. Up substantially By contrast, less than one in twelve say they are not at all (%) or not very (%) about the affect of these events on our local economy. Executives Weigh In on State Legislature s Role in Improving Utah s Economy Executives were asked to think of the most important thing the Utah State Legislature could do to help improve the state s economy. Each panelist was allowed to offer more than one solution. Please see Appendix B for all panelist comments. Top responses, with a sampling of the comments, are: Controlling or reducing taxes and fees (9%) Control taxes on common commodities that affect the population in general to allow for greater individual purchasing power. If we have lower taxes, we have more spending power. Make sales tax laws more simplified. Out-of-state companies have a SIZABLE edge over in-state, brick-and-mortar companies. Reduce the costs of owning and insuring equipment. Get rid of property taxes on equipment. If we pay sales tax on an item, then it should be ours FOREVER, free of taxes. Reduce taxes, and push Buy Utah. Streamline and simplify tax codes and compliance paperwork. Attract/ build up Utah businesses (%) Create strategic ways for business to grow. Utah has a solid and educated workforce, lower cost of living, and generally a strong ability to be competitive in the world economy. Growth incentives, tax initiatives, and other out-of-the-box thinking could really put Utah in a much stronger position vs. some of our neighboring states. 00 Dan Jones & Associates

6 Utah Quarterly Economic Forecast Q0: Key Findings Avidly promote and fund incentives to attract companies to come to Utah from other states. Continue to offer incentives to corporations to relocate to Utah or expand. Maintain a positive climate for business. Reduce regulation, lower taxes, maintain a stable financial position. Do not over-regulate () Stay out of the way. Leave it alone, and let capitalism take care of the economic adjustments that need to be made. Too many things to list. In general, cut back involvement. Dismantle bureaucracies. Quit trying to fix things. Stay out of the lives of the citizens. Stay out of the economy. The state and the government are always butting in, messing with our taxes. Be frugal/ balance the budget (9%) Continue to tighten budgets around the state, and keep those in place even when the economy improves. Tighten their belts across the board, reduce taxes on businesses and individuals to stimulate demand, and strengthen the economy. Pursue a course of legislative fiscal responsibility, and individual personal behavior and decorum, to create a stronger sense of trust and confidence in the minds of the people whose interests members of the legislature are supposed to be promoting and protecting. Stop government overspending. Get rid of the use-it-or-lose-it spending at the year s end. Reward workers for having a job, not always the unemployed. Small business development (9%) Focus on small business look at fair share and/or small business discounts when competing against large businesses. Help struggling companies get lines of credit. Small businesses with money will stimulate the economy and increase jobs Small businesses and entrepreneurs are the way to fix the economy. Create/offer incentives for small businesses to hire and keep employees. Don t forget the little people. Big business gets help from the government. So far, I have not seen any help come my way or way of small business. Provide an easy-step program for new business owners to start up their businesses. Next, provide training and incentives to help them grow their businesses. Focus on real issues (8%) Act in a balanced manner. Stop being so ideologically driven to the extremes. Be consistent. Take as many laws off the books as they put on. Address real problems, instead of wasting time on stupid message bills and other political grandstanding. Stop wasting money on moral crusades, and pursue meaningful legislation that helps all citizens, not just a select few. Work together for the public. Forget party lines and lobbyists. 00 Dan Jones & Associates

7 Utah Quarterly Economic Forecast Q0: Key Findings Deal with immigration issues (%) Drop the immigration issue. If anything, help immigrants become legal citizens. Pass an immigration bill similar to Arizona. There need to be limits and controls so that taxpayers are not funding so much. Incentives (%) Continue to support innovation and business incentives for growth. Reduce taxes and paperwork. Get people who aren t working off welfare, so they can contribute and reduce the burden of those that are working. Provide incentives to all for job growth. Responsibility to Fix the Nation s Economy is Collective Who bears the greatest responsibility to fix the US economy? According to Utah business leaders it is not a single entity. In fact, seven out of ten (%) say it is all of us American citizens, the federal government, major financial institutions, and big business. Some, however, feel a specific group should harbor the greatest responsibility for the mending our nation s Responsible to fix the US economy economy, namely American American citizens (%), citizens % and the federal government (%). Federal government % Support education (%) Invest in public and higher education. That is the key to sustained growth and a sound economy. Properly fund education. Make the difficult choices of a head tax for families currently overusing the system. A comparatively smaller number feel the burden to fix the economy should fall on major financial institutions (%) or big business (%). All of the above % Major financial institutions % Big business % Health care issues (%) Find a way to get health insurance costs in line with other expenses. Job development/ protection (%) Create job opportunities. Promote tourism/ conventions (%) Increase the state tourism marketing fund. Reduce the size/ role of government (%) Clean house. Term limits. Run it more like a business. 00 Dan Jones & Associates

8 Utah Quarterly Economic Forecast Q0: Key Findings Cost of Health Insurance Again Tops Economic Concerns Each quarter, executives are asked how they are about eleven economic factors, using a -to- scale, with one meaning not at all and seven meaning greatly. The cost of employee health insurance, with a mean score of., continues to rank as the top concern as it has for seven quarters. Not only does it rank as the top concern, it does so by.0 points, a sizeable margin on a -point scale. Gasoline prices (.9), the cost of salaries and wages (.8), and the impact of inflation on the cost to do business (.) rank second, third, and fourth on the collective list of executives economic concerns. The ability to compete in the marketplace (.), which currently ranks fifth on the list of concerns, historically ranked as eighth or ninth for the first ten cycles of this study, but has held the fourth of fifth spot for seven most recent quarters. Greatly Concern History: Economic Factors High Low Q0..09 Not at all Employee health insurance Gasoline prices Salaries and wages Impact of inflation Ability to compete Keeping qualified employees Cost of inventory and supplies Finding qualified employees Cost of utilities Cost of lease, rent, or mortgage.8 Foreign outsourcing 00 Dan Jones & Associates

9 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings Survey Data and Significant Findings Please refer to Appendix A for detailed response distribution : Using a 0 scale, please rate your level of optimism/ pessimism about the financial future of your company, based on profits/losses these past three months: Optimism/ Pessimism About Financial Future 0 : In the coming three months, would you predict that your company s economic health will be better than the prior three-month period, about the same as the previous three months, or worse than the previous three months? 9 Economic Health Next Quarter % % / Very optimistic 9 8 / Very pessimistic % % Much better () Somewhat better () About the same () Somewhat worse () Much worse () Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Females are more likely to say they are about the financial future of their companies. As the number of part-time employees within a company increases so does the likelihood of an executive saying he/she is optimistic about the financial future of their company. Males are more likely to say they expect the economic health of their companies to be better in the upcoming quarter. 00 Dan Jones & Associates 8

10 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings : In the coming three months, do you anticipate spending more, about the same, or less on capital expenditures than you have during the past threemonth period? Capital Expenditures Next Quarter : In the coming three months, do you anticipate that your workforce will increase (hire or re-hire more employees), decrease, or remain the same compared to the last three months? (This would include full-time, part-time, consultants, and contract/staffing agency employees.) Workforce Next Quarter % % Much more () Somewhat more () About the same () Somewhat less () Much less () % Increase greatly () Increase somewhat () Remain the same () Decrease somewhat () Decrease greatly () % Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Dan Jones & Associates 9

11 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings : If and when your company s budget tightens, which ONE of the following best describes how you will handle those pressures? If budget tightens... 8% % % % % % % % % % % % % % % Q0-A The Utah State Legislature can do a number of things that affect our local economy. What do you think is the most important thing they can do to improve the economy in Utah? What can the State Legislature do to improve Utah's economy? (Summary of coded responses. Multiple answers allowed) % Control taxes/ fees 9% Promote doing business in Utah % % 9% % % % % % % 9% 9% % 8% % % % % % % Absorb costs/ accept lower margins Absorb some/ pass on some Pass on costs Don't over regulate Be Frugal/ balance the budget Small business development Focus on real issues Deal with immigration issues 9% 9% 9% 8% % Incentives % % % % % 8% % % % % % % % % % % Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Support education Health care issues Job development/ protection % % % Promote tourism/ conventions % There is a greater likelihood of saying they will pass on costs among executives with 0 to and 0 to 0 full-time employees. Reduce the size/ role of government Don't let the federal government Address lending practices Enforce existing laws/ regulations % % % % There is a greater likelihood of saying they will absorb costs among executives with to 00 full-time employees. Promote construction/ development Keep jobs in Utah/ don't outsource Use our natural resources Change liquor laws % % % % Don't convene % Miscellaneous % Don't know/ no comment 00 Dan Jones & Associates 0

12 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings Q0-B: For your company, how did business in the second quarter of 00 compare to the second quarter of 009? % Business in 00 Second Quarter Compared to 009 Second Quarter Q0-C: Thinking of recent events, such as political upheaval relative to incumbents, stock market pullback, troubles in Europe, and the Gulf oil spill, how are you about the potential impact of these events on Utah s economic recovery? Concern About the Impact of Recent Events on Utah's Economic Recovery % % % % % Down substantially % Down marginally About the same Up marginally 9% Up substantially % % Not at all % Not very % Neutral Somewhat % Very As the number of full- and part-time employees increases, so does the likelihood of executives saying that business is up this quarter compared to the same quarter one year ago. As age increases, so does the likelihood of saying they are very about the impact of national and global events on Utah s economic recovery. Executives whose companies are headquartered in Salt Lake County, Davis County, or Weber County are more likely to say they are about the impact of current events on Utah s economic recovery. 00 Dan Jones & Associates

13 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings Q0-D: In your opinion, who bears the greatest responsibility to fix the US economy? Who bears the greatest responsibility to fix the US economy? Economic Concerns -: Please rate your level of concern about the following items as they affect your company within the next few months. Use a scale, with one meaning not at all and seven meaning you are greatly : % % # : Cost of employee health insurance % % % % % Federal Big business government % Major financial institutions American citizens All of the above % Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q / Not at all / Greatly 00 Dan Jones & Associates

14 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings Economic Concerns (continued.) # : # : Gasoline prices Cost of Salaries and Wages % % % % Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q / Not at all / Greatly / Not at all / Greatly As the number of part-time employees in an executives company increases, so does the likelihood that they will express greater concern about the cost of gasoline. Females are more likely to say they are about the cost of salaries and wages. Females are more likely to say they are greatly about gasoline prices. 00 Dan Jones & Associates

15 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings Economic Concerns (continued.) # : # : Impact of inflation on the cost to do business Ability to compete in the marketplace % % % % Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q / Not at all / Greatly / Not at all / Greatly Females are more likely to say they are greatly about the impact of inflation on the cost to do business. As the number of full-time employees in an executive s business increases, so does the likelihood that he/she reports concern about the cost of inflation. 00 Dan Jones & Associates

16 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings Economic Concerns (continued.) # : # : Keeping qualified employees Cost of inventory and supplies % % % % Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q / Not at all / Greatly / Not at all / Greatly Females are more likely to say they are about keeping qualified employees. Executives in seasonal businesses and those whose company is not headquartered along the Wasatch Front are more likely to say they are about the cost of inventory and supplies. 00 Dan Jones & Associates

17 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings Economic Concerns (continued.) # 8: # 9: Finding qualified employees Cost of utilities % % % % Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q / Not at all / Greatly / Not at all / Greatly Executives whose companies have been in business for 0 to years are less likely to say they are about the cost of utilities. 00 Dan Jones & Associates

18 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings Economic Concerns (continued.) # 0: # : Cost of rent, lease, or mortgage Outsourcing to foreign countries % % % % Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q / Not at all / Greatly / Not at all / Greatly As age decreases, so does the likelihood of executives saying they are not at all about outsourcing to foreign countries. 00 Dan Jones & Associates

19 Utah Quarterly Economic Forecast Q0: Survey Data & Key Findings Summary of All Eleven Economic Concerns The chart below summarizes all economic factors evaluated by Utah Economic Forecast panelists. To accommodate all the data, mean scores are listed separately in the table below the chart. Greatly History of Economic Concerns Employee health insurance Gasoline prices Salaries and wages Impact of inflation Ability to compete Keeping qualified employees Cost of inventory / supplies Finding qualified employees Cost of utilities Lease, rent, or mortgage Foreign outsourcing Not at all Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Current rank ECONOMIC CONCERN Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Employee health insurance Gasoline prices Salaries and wages Impact of inflation Ability to compete Keeping qualified employees Cost of inventory and supplies Finding qualified employees Cost of utilities Lease, rent, or mortgage Foreign outsourcing Dan Jones & Associates 8