Utah executives report 'cautious optimism' about future of the economy

Utah business executives are looking to the future with “cautious optimism” — perhaps with emphasis on “cautious.” According to the Salt Lake Chamber’s CEOutlook 2018 fourth-quarter 2018 survey, the business leaders are waning a bit in their confidence. The fourth-quarter 2018 CEOutlook Confidence Index decreased from 60.9 in last year’s third quarter to 55.5 for the fourth quarter.

The CEOutlook is a statewide economic survey of Utah business executives. Modeled after other national business sentiment surveys, it provides a forward-looking view of the Utah economy. The results of the survey are intended to help business and community leaders make informed decisions about likely future economic conditions. The Confidence Index is based on responses to the four standard questions included in each quarter’s survey. The index can range from zero to 100. A score below 50 indicates executives believe the economy will worsen; a score above 50 indicates a belief among executives that the economy will improve.

“Last quarter, I mentioned the changing global economic indicators. While Utah is not immune from the broader economic trends, it appears this quarter that business leaders remain cautiously optimistic about Utah’s economic trajectory,” said Derek Miller, president and CEO of the Salt Lake Chamber and Downtown Alliance. “There is no question that there is more uncertainty facing business, civic and elected leaders. That is why it is essential that we understand that, as business leaders, we can play an active role in defining our future.”

According to the fourth-quarter survey, 63 percent of executives report similar economic conditions for Utah’s economy as compared to the previous six months, and nearly one-third of executives note improvement, while the trend points to a moderating environment. The study also shows that a majority of executives, 67 percent, anticipate Utah’s strong economy will hold steady in months ahead. Factors that executives believe could have a negative impact on Utah’s economy include the tight labor market, rising housing prices and declining sentiment.

“A majority of executives, 61 percent, in the CEOutlook are still anticipating moderate or significant profit growth in the year ahead,” said Natalie Gochnour, director of Kem C. Gardner Policy Institute and chief economist at the Salt Lake Chamber. “I agree, but still urge caution. Rising labor, interest, housing, material and transportation costs will ultimately mute growth. Predicting a time of turndown — or even modest growth — is exactly why we collect this data. Utah needs a reliable leading indicator. After all, economists have predicted all of the past three recessions. The challenge will be to make decisions that extend this expansion even longer. If any state can do it, Utah can.”

The full report is available online at http://slchamber.com/ceoutlook/.