Execs foresee drop in workers

Utah executives are predicting decreases in their work forces and lower levels of capital expenditure, according to the Zions Bank Utah Quarterly Economic Forecast for the final quarter of 2008.

Optimism about all things financial for the companies declined from a mean score of 7.87 out of 10 in mid-2006 to 5.86 in January, when Dan Jones & Associates Inc. conducted the survey among companies' CEOs. Only one in 10 rated their company's outlook as a sunny 9 or 10.

More than a third predict their work forces will decrease in the coming quarter — only 9 percent believed that in 2006 when Zions launched the executive survey. In the first quarter of 2008, 34 percent of the executives were predicting an increase in their work force. By the end of the year, it was 14 percent. Now twice as many predict a reduction in work force as predict an increase (37 percent to 17 percent).

The executives predicted their futures based on the previous quarter, so there's some lag. The survey results released Monday were based on surveys conducted Jan. 5-27.

But of the 11 different economic factors the survey tried to measure, only two reached their highest levels of concern to date — ability to compete in the marketplace (23 percent) and cost of the lease, rent or mortgage (10 percent) — and they were not the issues of highest concern.

The other nine factors are not at peak levels compared to other quarters, presumably indicating less interest in individual factors and more big-picture worries, the report said. Those include the cost of health insurance and salaries, employee retention, gasoline prices, finding qualified employees and outsourcing to foreign countries. The question measured an executive's expected level of concern "within the next few months."

If and when their budgets tighten, 10 percent of the executives said they'd pass on costs, 23 percent said they'd absorb them and 68 percent said they'd use a combination of absorbing and passing on costs.

Zions began conducting the survey in the second quarter of 2006. Volunteer panelists are still being sought. Information on that, as well as the entire 30-page report, is available at utaheconomicforecast.com.

E-mail: lois@desnews.com