Outlook among Tennessee business leaders took an expected plunge because of the ongoing coronavirus pandemic and resulting economic downturn, though outlook on the future remains strong, according to the latest Tennessee Business Barometer report by MTSU’s Jones College of Business.
The latest Tennessee Business Barometer index plummeted to -219 from 508 just three months ago in January, marking the first time the overall statewide index has been in the negative range, noted Tim Graeff, MTSU marketing professor and director of the university’s Office of Consumer Research, which oversees the quarterly index.
“Business leaders’ negative views of the current economic situation clearly reflect the results of shutting down a large part of the economy, quarantining consumers, and the unemployment that comes with it,” Graeff said. “Perceptions of the current economic situation have completely inverted from January.”
The online survey includes four sub-indices: current outlook, future outlook, business/firm outlook and employment outlook. Find the full survey report and previous reports at http://www.mtsu.edu/consumer/reportsbarometer.php.
Tennessee remains under a statewide stay-at-home order until at least April 30, meaning that non-essential businesses remain closed and residents continue to limit travel and practice social distancing to stop the spread of the COVID-19 virus.
Businesses continue to fill the economic sting, and although no one knows the exact date when the economy will reopen, most business leaders surveyed expect it to be sooner than later.
While relatively few (10%) expect things will return to normal by May 1, the majority (55%) expect to be able to get back to “business as usual” by July 1.
Other report highlights:
- Nearly three-fourths of survey respondents (74%) said they are “very concerned” the coronavirus will have significant negative effects on the overall U.S. economy.
- Further, slightly more than half (53%) are very concerned the coronavirus will have significant negative effects on their firm/business.
Yet as perceptions of the current economy falter, outlook for the future economy actually improved significantly. The Future Expectations Index rose significantly to 168 from 99 in January, the highest level for that index in two years.
“This suggests business leaders expect the economy to recover quickly once businesses are allowed to open and consumers resume shopping and spending on travel, entertainment, dining out, and other activities that make up a majority of our economy,” Graeff said.
Increasing optimism results from federal support from the Small Business Administration and the Paycheck Protection Program (though funding is now in question), time to adapt to the crisis and alter business practices, strong underlying economic fundamentals, and confidence in the current administration to handle the situation.
The current online survey of 60 business leaders from across Tennessee was conducted April 6-10 in partnership with the Tennessee Chamber of Commerce and Industry. The sample of respondents includes business owners (41%), vice presidents (7%), senior managers (27%), and managers/others (26%) at firms of various sizes.
The inaugural survey in July 2015 registered an index of 325. The next survey is scheduled for July.
— Jimmy Hart (Jimmy.Hart@mtsu.edu)