Outlook among Tennessee business leaders “retreated significantly” in the last three months, driven by inflation fears, a softening economy and supply chain disruptions, among other concerns, according to results from the latest Tennessee Business Barometer by MTSU’s Jones College of Business.

The latest Tennessee Business Barometer Index, which measures state business leaders’ perceptions of the current and future economy, continued its drop to 207 in October, down from 434 in July and 494 in April following a noticeable jump at the beginning of the year. The current online survey of 107 business leaders from across Tennessee was conducted in partnership with the Tennessee Chamber of Commerce & Industry between Oct. 5-18.

Dr. Tim Graeff

“Frustrations and worries about the overall economy, and inflation in particular, have driven down the index,” noted Tim Graeff, director of the university’s Office of Consumer Research, which oversees the quarterly index. “This decline in perceptions of the overall economy mirrors a similar decline in the Conference Board’s nationwide measure of CEO Confidence. Perceptions of the Tennessee economy also declined, but not as significantly.”

The Conference Board is a nonpartisan think tank that surveys U.S. consumers each month to produce a Consumer Confidence Index.

Find the full Tennessee Business Barometer survey report and previous reports here.

With respect to the nation in general, higher inflation was the most often cited concern or worry among survey respondents. This was followed by concerns regarding increasing polarization between political parties, the inability of political leaders to solve problems, more governmental regulation, and higher taxes.

This fever chart shows the Tennessee Business Barometer Index and sub-indices results since its inception in July 2015. The latest Business Barometer Index is 207 for October, down from 434 in July. (Courtesy of the MTSU Office of Consumer Research)

Other highlights

• Concerns about a softening economy and supply chain disruptions caused the Business/Firm Performance Index to weaken.
• There were net decreases in the percent of business leaders who expect their firm to grow more, invest more, increase sales, increase profitability and increase inventories compared to last year.
• With respect to individual firms or businesses, business leaders are concerned about the possible negative effects of political uncertainty, economic uncertainty, rising health care costs, supply chain management and increasing taxes.
• Rising prices and a shortage of workers can lead to restrictions in supply chains, which can further stifle economic activity and growth.

“Many Tennessee businesses continue to struggle to find qualified employees. Even though there was a small net increase in the percent of firms likely to increase hiring, there was a similar net decrease in the percent who said it is easy to find qualified employees,” Graeff noted.

About the Barometer

The Tennessee 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.

The inaugural survey in July 2015 registered an index of 325, and the next survey is scheduled for January 2022.

For more information about the MTSU Office of Consumer Research, visit www.mtsu.edu/consumer. For more information about the Tennessee Chamber of Commerce & Industry, visit www.tnchamber.org.

— Jimmy Hart (Jimmy.Hart@mtsu.edu)