In mid-April, MTSU’s Office of Consumer Research (OCR) published the results of its quarterly Tennessee Business Barometer report. This survey measures how business leaders from across the state perceive the performance of Tennessee’s economy.
The latest findings from this report score the Business Barometer at 180 points. This is a drop of almost 100 points from its January score of 287.
Director of MTSU’s OCR Dr. Timothy Graeff oversees the Tennessee Business Barometer report. He shares with Murfreesboro Voice that the OCR started in 2000. Since then, the university’s research on economic perception has evolved greatly.
“At that time, we were doing telephone surveys…” he says. “In 2015, we switched to doing online surveys. And at the same time, we also reached out to the Tennessee Chamber of Commerce & Industry. We met with them and we said, ‘Look, we're doing these consumer surveys. We'd also like to do surveys of businesses and business leaders. Would you be interested in partnering with us?’”
Through the relationships it's cultivated since 2015, the OCR was able to grow its participants base for these online surveys. Each Tennessee Business Barometer report gives the OCR a greater understanding of how businesses perceive the state economy’s performance.
Dr. Graeff discusses the findings from the latest Tennessee Business Barometer report, saying “It took a pretty significant drop from when we compared it to January, the last time we surveyed the business leaders. But, in context, it's still not as low overall as it was back in April of 2020. That's when everything got shut down... What is notable is the perceptions of the future—their outlook, their optimism—that is now significantly lower than it was even in April of 2020…Their outlook for the future is the lowest that we've ever seen it. So that's a little disconcerting.”
The loss of confidence experienced by business leaders can have a direct impact on the economy. Explaining what potential effects this confidence loss could have on Murfreesboro, Dr. Graeff says “It could be the amount of money they’re going to invest… in purchasing inventory, invest in expansion, invest in new outlets, invest in hiring people… When businesses spend money to grow and expand, that helps grow the economy because they’re spending money.”
According to Dr. Graeff, business leaders in Tennessee still see the state’s economy as performing better than the national economy. Pointing to the individual answers given in the survey for the latest Tennessee Business Barometer report, Dr. Graeff says that the responses are still good. “We’ve consistently found that. So, that’s still a good sign,” he says. “Even though we’ve got this decrease, they’re still relatively positive.”
There are a number of factors that have lowered business leaders’ confidence in the state’s economic performance. These factors include general worries about inflation, increases in taxes, continued supply chain disruption, Russia’s invasion of Ukraine, and the lingering coronavirus.
Staffing has been a consistent concern for the businesses surveyed in the report. Only 1% of the businesses surveyed felt that qualified employees were easy to find. Even though the state is seeing an influx of residents from other areas, jobs are still left unfilled by local businesses.
In light of the report, Dr. Graeff observes that there’s no magic bullet strategy for businesses to combat concerning issues. But there are certain things that business leaders may use to offset costs. “You may see them try to automate a little bit more,” he says.
Coming from the academic side of marketing, Dr. Graeff offers that businesses can focus on improving relationships to boost their own performance. A stronger employee pool can be created through “internal marketing” strategies, including better employee pay and benefits, and the creation of more appealing company culture. By promoting a business that’s invested in equity and better treatment of employees, business leaders can label their brand with a trustmark that entices consumers.