Latest Survey Shows Steady Optimism as Business Leaders Applaud New Tax Law
The Tennessee Business Barometer remained steady in January, reflecting an unchanged outlook regarding the economy compared to October, according to the latest snapshot of business leaders’ opinions as measured by MTSU’s Jones College of Business.
The overall index held constant at 577 in January, the same as October and up from a July index of 461. Find the full survey report and previous reports at http://www.mtsu.edu/consumer/reportsbarometer.php.
Two offsetting trends produced the latest index results, according to Tim Graeff, MTSU professor of marketing and coordinator of the index through the Jones College’s Office of Consumer Research.
On the positive side, current perceptions and future expectations for the overall economy have improved as Tennessee business leaders “increasingly feel optimistic regarding the direction of the economy. The newly passed Tax Cut and Jobs Act has helped to boost expectations.”
The majority of respondents (79 percent) expect the new tax law to have a positive effect on the overall U.S. economy, the economy in Tennessee (76 percent), their industry (70 percent), and their individual firm/business (72 percent).
However, declines were seen in the outlook for the microeconomic environment — individual firm/business performance — as business leaders expressed decreased expectations for individual firm/business growth, investments, sales, profitability and inventories.
Although business leaders expect the new tax law to significantly improve overall economic conditions, relatively few respondents plan to offer extra bonuses or increased compensation to their employees (9 percent) or increase hiring (11 percent) in response to the new law. One in three (33 percent) expect to increase capital expenditures and/or investments in response to the new tax law.
The overall index score is totaled from four sub-indices measured in the 17-question survey: current economic situation, future economic expectations, business/firm performance and employment outlook.
The current Tennessee Business Barometer online survey of business leaders from across Tennessee was conducted between Jan. 10-12 in partnership with the Tennessee Chamber of Commerce and Industry.
The inaugural survey in July 2015 registered an index of 325.
For more information about the MTSU Office of Consumer Research, visit www.mtsu.edu/consumer. For more information about the Tennessee Chamber, visit www.tnchamber.org.
