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Business leaders across Tennessee continue to be more optimistic about the state’s economic outlook than the nation’s, according to the most recent survey conducted by the Boyd Center for Business and Economic Research at the University of Tennessee, Knoxville.

The Tennessee Business Leaders Survey shows that respondents credit Tennessee’s positive outlook largely to stronger business investment and better government leadership. Looking more broadly, 80 percent view the US economy as worse than a year ago, before the COVID-19 pandemic began, but 90 percent believe it has improved or held steady over the past six months. Thirty six percent of respondents in August 2020 expected the US economy to be a little or considerably better over the next 12 months, but that number climbed to almost 50 percent in the January 2021 survey.

“This shows us that Tennessee business leaders are optimistic that the worst economic effects of the COVID-19 pandemic are behind us,” said Bill Fox, director of the Boyd Center. “There’s even more optimism about the Tennessee economy, and an appreciation for how quickly many businesses were able to adapt to the new normal of the past year.”

Two-thirds of Tennessee business leaders expect the Tennessee economy to be better than the national economy over the next 12 months.

a graph of the Tennessee economy compared to the nation

Survey results indicate that economic conditions may be improving in Tennessee. Almost 70 percent of respondents in January 2021 had a positive outlook for the Tennessee economy over the next 12 months, compared to just 37 percent in August 2020. Business leaders in Middle Tennessee appeared to become much more optimistic about the state’s economy, jumping from 29 percent with a positive outlook in August 2020 to 63 percent in January 2021. Only 58 percent of respondents cited adverse economic conditions as the top challenge for their business, whereas six months ago 80 percent listed it as their foremost concern. Government regulations are a big concern as well, listed by 56 percent of respondents. Other top challenges named include human resources, health care costs, and taxes.

The ability to find trained workers continues to be an issue across the state, with 55 percent of respondents saying they were unable to find sufficient workers. This finding varied notably by region and was less of an issue in Middle Tennessee, where 52 percent of businesses in reported no problems compared to a third of employers in the eastern and western portions of the state.

In addition to the survey, about 30 Tennessee businesses leaders participated in a discussion last week moderated by the Boyd Center’s Don Bruce, a professor of economics in UT’s Haslam College of Business.

“One businessman said he is a complete believer in working remotely now, noting that productivity and engagement have been a success story of the pandemic,” Bruce said. “Others highlighted the federal government’s swiftness in stimulus check distribution and credited the Paycheck Protection Program for saving businesses across Tennessee. The discussion was very insightful and was a great way to connect with these leaders and get a better picture of the current state of the economy than we are able to get from the aggregated data.”

One finding that came across clearly among survey participants is that businesses were impacted very differently by the COVID-19 pandemic. Forty-six percent of respondents said their revenues have declined over the past year, but 29 percent reported revenue growth. Thirty-nine percent said the pandemic had prompted a business reorganization, and 26 percent had laid off workers. For 21 percent of those surveyed, however, increased revenue had allowed them to hire more employees.

Only 8 percent plan to make a COVID-19 vaccination mandatory for employees when vaccines become more broadly available; more than 20 percent plan to encourage or provide vaccinations for their employees.

What employers plan to communicate to employees about COVID-19 vaccines when vaccinations become widely available.
a graph showing most employers say COVID vaccines will be optional

The Boyd Center, located in the Haslam College of Business, conducted the survey between January 19 and February 1, gathering responses from business leaders from across Tennessee. Respondents represent a broad sample of businesses across all industries and range in size from fewer than 50 to more than 5,000 employees. The full results can be found online.


Erin Hatfield (865-974-6086,