Q2
About the Salt Lake Chamber’s CEOutlook The Salt Lake Chamber’s CEOutlook is a statewide economic survey of Utah business executives. Modeled after other national business sentiment surveys, it provides a forwardlooking view of the Utah economy. The survey results are intended to help business and community leaders make informed decisions about likely future economic conditions. The survey will continue to be evaluated through 2020 to assess its predictive value. All past CEOutlook reports can be found here: https://slchamber.com/ceoutlook/
Utah CEOs battle COVID-19 recession
Methodology
By Derek B. Miller, President and CEO, Salt Lake Chamber
2020
Arts, entertainment, recreation, accommodation, and food services Construction Educational services, health care, and social assistance Finance, insurance, real estate, rental, and leasing Information Manufacturing Mining Other services, except government Professional and business services Retail Trade Utilities Wholesale Trade
The Salt Lake Chamber is Utah’s largest and longest-standing business association. A statewide chamber of commerce with members in all 29 Utah counties, the Chamber represents the broad interests of the state’s 63,000-plus employers, which employ more than 1.4 million Utahns. This includes thousands of members and their employees. The Kem C. Gardner Policy Institute at the University of Utah develops and shares economic, demographic and public policy data and research that help individuals and the community make informed decisions. Housed in the David Eccles School of Business, the Institute seeks to be a vital gathering place and center for independent economic, demographic and public policy thought leadership that helps the Utah economy to prosper. The Institute is a strategic partner with the Salt Lake Chamber in serving Utah.
2020
I Second Quarter
As leaders spur change in their organizations, they have worked with state and local officials to unite around overcoming this pandemic. CEOs gave state leaders an 83% “above average” or “far above average” rating in response to the crisis. It is a reflection of the spirit of collaboration and unity in our state.
For More Information Heidi Walker COO, Salt Lake Chamber 801-328-5081, hwalker@slchamber.com Natalie Gochnour Director and Chief Economist, Kem C. Gardner Policy Institute and Salt Lake Chamber 801-585-5618, natalie.gochnour@eccles.utah.edu Marin Christensen Research Associate, Kem C. Gardner Policy Institute 801-581-6521, marin.christensen@utah.edu
CEOutlook
Utah’s economy is improving and initial unemployment claims have dropped now for seven weeks running. Likewise, economic conditions in Utah continue to lead the country, even during these challenging times. To ensure this trend continues we must remain vigilant and follow the Utah Leads Together plan to adapt, innovate and overcome. I admire and am grateful for how Governor Herbert, the Utah Legislature and our business community have come together to lead throughout this pandemic. By doing what Utahns do best and are known for, we have been able to keep our economy going and serve a vital need for our collective wellbeing. CEOutlook
80.0 70.0 66.3 60.0 50.0
62.8 62.0 60.6 62.4 62.3 60.9
55.5 53.2
60.1
53.3
-5.8% Optimism
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3.4% 3.3% 3.4% 3.2% 3.1% 3.4% 4.0% 3.0% 3.1% 2.9% 3.0% 2.6% 2.5% 3.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0%
61.2 59.4
40.0 30.0
32.3
20.0 10.0 0.0
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Concern
Respondent Industry Make-Up
Year-Over Job Growth
The CEOutlook Index saw a 45% decline in the second quarter, and we learned the United States is officially in a recession. The impact of the coronavirus on Utah businesses was acute, and job displacement was severe. However, despite this challenging news it is heartening that many Utah CEOs are allowing this crisis to spur innovation in their product offering, business model and approach to health and safety.
The Salt Lake Chamber’s CEOutlook Confidence Index decreased from 59.4 in 2020-Q1 to 32.3 for 2020-Q2 due to effects of the COVID-19 pandemic.
Confidence Index
The Salt Lake Chamber partners with the Kem C. Gardner Policy Institute at the University of Utah to design, tabulate and assist in analyzing the survey. Sixty business executives from Utah’s fourteen major industries are asked to respond to 6-8 questions, depending on their responses, about their company and Utah’s economic performance. Respondents are selected by each industry’s contribution to the Utah economy. Panelists come from a range of firm sizes and locations within Utah.
Confidence Index and Job Growth
Q1 Q2 2020
The Salt Lake Chamber’s CEOutlook Confidence Index is based on responses to the four standard questions included in each quarter’s survey (Questions 1-4). The Index can range from 0 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. Source: Index is produced from the Salt Lake Chamber’s CEOutlook with support from the Kem C. Gardner Policy Institute, including analysis of the Utah Bureau of Labor Statistics.
Utah CEOs react to the COVID-19 recession
By Natalie Gochnour, Director and Chief Economist, Kem C. Gardner Policy Institute and Salt Lake Chamber The CEOutlook index fell a record 27.1 points in the second quarter, a difficult, but unsurprising result from the economic shock caused by the COVID-19 pandemic. The index, which is a composite of CEO sentiments concerning current and future economic conditions, was measured at a time when Utah businesses furloughed or laid off approximately 150,000 positions, an amount roughly equivalent to all of Utah’s job gains over the past three years. Impacts from the COVID-19 recession are still playing out. Uncertainty, risk, and opportunity are the watchwords, as this cataclysmic economic event rocks business and consumer confidence, even as it creates new economic possibilities. The survey makes clear Utah CEOs are focused on managing risk, consumer sentiment, and the potential for a second wave of the virus. They are also focused on the need to have cash reserves and crisis plans. When asked about the economic lessons learned one CEO commented, “I’ve learned that having a disaster plan that you test and revisit each year is vital.” Pandemics end and we will get through this. I think the recovery has begun, but it will be a long and slow process. COVID-19 is not a short-term problem, but rather a new risk we must manage.
Second Quarter
I 2020