MTSU surveys: Tennessee consumer outlook plummets, but business leaders more positive on economy

MURFREESBORO, Tenn. — Heading into the holiday shopping season, Tennessee faces a somewhat disconnected economy — consumer outlook plummeting while sentiment among business leaders is rising, according to the Consumer Research Institute at Middle Tennessee State University.

Housed within MTSU’s Jones College of Business, the Consumer Research Institute recently issued results from its latest Tennessee Consumer Outlook Index survey, which revealed that positive sentiment plummeted to 16% statewide, the lowest score in 10 years, while negative sentiment increased to 35%. 

This fever chart shows the overall Tennessee Consumer Outlook Index survey results along with results for the three sub-indices since 2016. (MTSU Consumer Research Institute)

That’s in contrast to Tennessee business leaders who responded to the latest Tennessee Business Barometer online survey, where positive sentiment among business leaders is now at an all-time high of 48% (and negative sentiment is at 11%).

This fever chart shows the overall Tennessee Business Barometer survey results along with results for the three sub-indices since 2015. (MTSU Consumer Research Institute)

In short, Tennessee consumers are generally pessimistic, and business leaders are optimistic about the state of the economy, noted Michael Peasley, institute director and assistant professor of marketing.

A summary of survey results includes:

• Only 9% of Tennessee consumers this quarter said that conditions in the U.S economy are favorable, and only 24% think that conditions will be better six months from now.
• Only 10% of Tennessee consumers reported that their personal financial situation has improved over the last year, while 40% stated it has worsened, and 49% indicated it remains the same.
• 55% of Tennessee consumers stated that they don’t believe they could survive financially if they lost their job.

Consumers anticipate saving, spending less

The survey also revealed that Tennessee consumers do not believe now is a good time to make larger purchases, and they anticipate spending less for goods and services. 

• Only 10% of Tennessee consumers believe it is a good time to make large purchases.
• Only 9% of Tennessee consumers believe now is a good time to buy a house.
• Only 11% of Tennessee consumers believe now is a good time to buy a car.
• Over 50% of Tennessee consumers report saving less than they did last year. 

Business leaders optimistic 

In contrast, the Tennessee Business Barometer survey showed that the state’s business leaders’ concerns about inflation, taxes, tariffs, and staffing have all decreased over the last year. 

• 59% of Tennessee business leaders said they expect their firm’s sales to increase this year, and only 9% expect their sales to decrease.
• 59% of Tennessee business leaders said they expect their firm’s profits to be higher than last year, and only 12% expect their profits to decrease.
• 45% of Tennessee business leaders said their number of employees will increase this year, while 7% said their employee count will decrease. 

Full results, including charts and graphics, for the Consumer Outlook Survey and the Tennessee Business Barometer can be found at https://consumer.mtsu.edu. 

About Consumer Outlook Index

The Consumer Outlook Index is based on consumers’ responses to 11 questions measuring their perceptions of the current economy, future economy, jobs, personal finances, and whether now is a good time to make large purchases. Four questions make up the Current Situation Index, four questions make up the Future Expectations Index, and three questions make up the Purchasing Index. 

The scores for each index are computed by adding the percentage of favorable responses to each question and subtracting the percentage of negative responses to each question. A net positive score indicates consumers who hold positive views of the economy outnumber those who hold negative views of the economy (vice versa for a net negative score).

About Tennessee Business Barometer

The Tennessee Business Barometer scores are based on business leaders’ responses to 15 questions that measure their perceptions of the current economy, future economy, regulatory conditions, and economic conditions related to their firm and industry. Five questions make up the Current Economic Situation Index, five questions make up the Future Expectations Index, and five questions make up the Firm Performance Index. 

The Overall Outlook Index is based on all 15 questions. The scores for each index are computed by adding the percentage of favorable responses to each question and subtracting the percentage of negative responses to each question. A net positive score indicates business leaders who hold positive views of the economy outnumber those who hold negative views of the economy (vice versa for a net negative score).

For more information about the surveys, contact Peasley at Michael.Peasley@mtsu.edu

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