Rising gasoline prices have sent Utah business executives' optimism about the economy plummeting.
A Zions Bank quarterly economic forecast, released Monday, shows that concerns about high gas prices, inflation and the cost of employee health insurance have put high-level executives' optimism about the financial futures of their companies at the lowest point in the past two years.
Only 30 percent of respondents predict their companies' economic health will be better during the upcoming quarter. That figure was as high as 51 percent in both the 2007 first quarter and the 2006 third quarter.
On a scale of 1 to 10, from "very pessimistic" to "very optimistic," optimism received a mean score of 6.45 for the second quarter among the executives who were surveyed June 16 through July 11 by research firm Dan Jones & Associates. The score has drifted steadily downward since a 7.80 score in the 2006 fourth quarter.
"We're seeing quite a shift in the views of our local business leaders, who reported a mean level of optimism at 7.87 when we launched the study two years ago," Pat Jones, co-owner of Dan Jones & Associates, said in a prepared statement. "This substantial decline reflects caution among Utah's business community. Driving the increase in economic pessimism are economic concerns such as gasoline prices and inflation that are at their highest levels in the history of our study."
Also hitting a low point was expected spending on capital expenditures. Thirty-five percent of the executives predicted lower spending, an increase from 19 percent in the 2006 second quarter.
The survey indicated more executives were expecting to increase their work force than decrease it 25 percent to 19 percent, respectively during the third quarter. Two years ago, 51 percent expected to boost their staffs and only 9 percent expected cutbacks.The 29-page report can be viewed at utaheconomicforecast.com.