Business leaders pessimistic

Utah business executives continue to be less optimistic about their companies' economic futures, according to a Zions Bank quarterly survey.

The Zions Bank Utah Quarterly Economic Forecast featured an "optimism" score of 6.13 for the third quarter. That figure is the lowest since the surveying began in the second quarter of 2006, when the score was at its high point of 7.87 on a 1-to-10 scale, with 1 being "very pessimistic" and 10 being "very optimistic."

For comparison, the optimism level was 6.45 in the second quarter of this year.

The forecast is based on surveys of high-level executives throughout the state. The surveys were conducted by Dan Jones & Associates. The optimism category gauges executives' feelings about the financial futures of their companies based on profits or losses during the past three months.

"It's been insightful to track the views of our local business leaders and to see how their confidence has shifted with the slowing of the economy," Pat Jones, co-owner of Dan Jones & Associates, said in a prepared statement when the third-quarter results were released Monday.

"While executives are expressing less optimism and more caution in spending, all the news from the survey is not dire. Concern over individual economic factors — such as employee retention and health-care costs — is actually less intense than it has been in previous quarters."

The results also show that 53 percent of the surveyed executives expect less capital spending — the first time the survey has had a majority anticipating lower spending levels — and a smaller work force in the fourth quarter.

The top economic concern for Utah executives was the price of gasoline, but the survey was conducted Oct. 1-17 — before prices slipped to their current level. Other top concerns were the cost of employee health insurance, the impact of inflation on the cost of doing business, and the cost of salaries and wages.

More respondents (26 percent) expect their work force to shrink than those who believe their staffs will grow (21 percent) — another first for the survey. Twenty percent of the executives said that they will most likely absorb costs and accept lower margins if their budgets tighten, while 14 percent said they will pass on costs.

The 30-page report can be viewed at utaheconomicforecast.com.

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E-mail: bwallace@desnews.com