Outlook for the future dropped among the state’s business leaders following the November election and subsequent Electoral College certification, according to the latest Tennessee Business Barometer by MTSU’s Jones College of Business.

Dr. Tim Graeff

The latest Tennessee Business Barometer Index decreased to 212, a noticeable dip from 309 in October. The current online survey of 125 business leaders from across Tennessee was conducted between Jan. 11-18.

Although outlook had surged higher in October 2020 (up from 88 in July) prior to the hotly contested presidential election between incumbent Donald Trump and eventual winner Joe Biden, “optimism for a brighter future has now faded,” noted Tim Graeff, director of the university’s Office of Consumer Research, which oversees the quarterly index.

The Business Barometer is an online opinion survey that tracks an overall index and four sub-indices: current outlook, future outlook, business/firm performance and employment outlook. Index scores are calculated from the percentages of positive and negative responses to a series of questions about perceptions of the economy.

This fever chart shows the Tennessee Business Barometer Index and sub-indices results since its inception in July 2015. The latest Business Barometer Index dropped to 212 this month, down from 309 in October. (Courtesy of the MTSU Office of Consumer Research)

The dip in the latest index resulted from two contrasting trends, said Graeff, a professor of marketing.

• Expectations for individual firm/business performance continued to improve.The Business/Firm Performance Index rose to 65 from -24 in October, driven by growing optimism regarding stronger growth, higher sales, and higher profitability compared to last year.
• However, outlook regarding overall economic conditions fell sharply.The Future Expectations Index plummeted to 6 from 188, driven by fears of worsening conditions for the overall U.S. economy along with fears of increasing regulation and higher taxes.
• Perceptions of the current economic situation and the employment outlook remained steady.

November election, COVID-19

With Tennessee voters again breaking strongly for the Republican Trump (60.7%) to Democrat Biden (37.4%), respondents were also asked about the possible effects of the November election on the economy and their firm or business.

President Joe Biden

Donald Trump

• The majority of Tennessee business leaders (62%) expect the results of the recent election to have a negative effect on the overall U.S. economy. Only 23% expect a positive effect.
• However, concerns for their individual firm/business were less extreme. Slightly less than half (46%) expect the results of the election to have a negative effect on their firm/business, whereas 22% expect a positive effect.
• When asked about dealing with COVID-19, most (64%) said it is at least somewhat likely there will be more business shutdowns, whereas only 20% say future shutdowns are unlikely.

Find the full survey report and previous reports at https://bit.ly/2GZvO7U.

The Tennessee Business Barometer survey is a collaborative effort between the Jones College of Business at Middle Tennessee State University and the Tennessee Chamber of Commerce and Industry. The inaugural survey in July 2015 registered an index of 325, and the next survey is scheduled for April.

For more information about the MTSU Office of Consumer Research, visit www.mtsu.edu/consumer.

— Jimmy Hart (Jimmy.Hart@mtsu.edu)

These three bar charts measure responses to questions in the January Tennessee Business Barometer survey about November election and COVID-19 impacts to the economy. (Courtesy of the MTSU Office of Consumer Research)