Executives react to COVID-19 recession with drop in confidence and firm expectations

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Utah business executives statewide report a significant decline in confidence along with an expectation for future growth, both related to economic consequences associated with the coronavirus.

The findings were released today as part of the 2020-Q2 CEOutlook, a statewide economic survey of Utah business executives conducted in partnership with the Kem C. Gardner Policy Institute at the University of Utah. 

The CEOutlook Confidence Index decreased from 59.4 in 2020-Q1 to 32.3 for 2020-Q2, as executives report Utah’s economy contracted during the height of the pandemic.

“The CEOutlook Index shows a 45% decline in the second quarter, and we learned the United States is officially in a recession,” said Derek Miller, president and CEO of the Salt Lake Chamber. “In recent weeks, Utah’s economy has improved as businesses have cautiously reopened. Unemployment claims have dropped seven weeks running, and economic conditions in Utah continue to lead the country, even during these challenging times. Still, there is much work to be done for our state’s economic revival.”

According to the second-quarter 2020 CEOutlook survey, optimism declined during the Stay Safe to Stay Home directive. Further, the expectations of firms in Utah were below that of their industry, more broadly correlating with the overall CEO decline in confidence. However, 93% of executives reported an average or above average response to the pandemic from the state government, and over two-thirds felt private entities were responding positively. 

“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 pandemic,” said Natalie Gochnour, director of Kem C. Gardner Policy Institute and chief economist at the Salt Lake Chamber. “Economic challenges 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 risk management and consumer sentiment remain top concerns amid the virus’ second wave. Interest around supply chains, remote work and government response remain key issues on the mind of Utah executives, and leaders stress the need for cash reserves, flexible work plans, contingent financial models and disaster preparedness as lessons to carry forward. 

To view the full 2020-Q2 report and to learn more about the CEOutlook, visit: http://slchamber.com/ceoutlook/