Tennessee employers overwhelmingly agree that federal tax cuts and inflation control would be more beneficial to their companies than expanded tariffs or immigration control, according to a new survey by the Boyd Center for Business and Economic Research at the University of Tennessee, Knoxville.
The winter 2024 Tennessee Business Leaders Survey, administered in January 2025, asked business leaders to prioritize potential policy changes with the new presidential administration. Four out of five business leaders cited the renewal of 2017 federal tax cuts, both individual and corporate, or continued progress in controlling inflation through Federal Reserve monetary policy as their top priority. Less than 10% said expanded immigration control or more tariffs on imported goods would be beneficial to the success of their companies.
The outlook on recession continued to ease, with 58% of business leaders predicting the chance of recession is less than 50% this year. In comparison, when that question was first asked in the summer 2022 survey, only 16% had similar feelings. On the opposite end of the spectrum, only 5% of business leaders this year have an elevated fear of recession (greater than 50%), compared to over half of respondents in 2022.
“Although worries of recession are significantly lower than they were nearly three years ago, inflation is still a major concern,” said Don Bruce, director of the Boyd Center. “Tennessee business leaders have made it crystal clear that they hope the president can enact policies that offer relief.”
Business leaders continue to see a rosier economy in Tennessee, with three out of four respondents expecting the state’s economy to outpace the national economy in the coming year. Roughly two-thirds also believe the state’s business climate could be improved more if Tennessee prioritized enhanced workforce development and technology infrastructure. In West Tennessee, about 65% of business leaders also heavily favored business development incentives.
The top challenges cited by Tennessee business leaders include adverse economic conditions (39%) and governmental regulations (37%). A quarter of respondents also cited global political instability, supply chain issues, health care costs and human resources. Business leaders were more likely to be concerned about foreign competition in East Tennessee, U.S. trade agreements in West Tennessee and taxation in Middle Tennessee.
Two-thirds of business leaders said there is an insufficient supply of appropriately trained workers, and almost half of respondents said their job applicants lack technical skills, work ethic, realistic compensation expectations and initiative. In West Tennessee, 85 percent of business leaders cited work ethic as the largest missing attribute. Nearly two-thirds of respondents said Tennessee should improve training and education opportunities to increase the supply of workers.
Roughly half of the survey respondents said they have trouble attracting and retaining workers, and the cost of housing was the most-cited reason in both East Tennessee (50%) and Middle Tennessee (55%). West Tennessee respondents were more likely to cite the quality of local schools (40%). Roughly one in three business leaders across the state cited the cost of childcare as a reason as well.
The full set of survey responses is available on the Boyd Center website.
The Boyd Center, located in UT’s Haslam College of Business, conducted the survey between Jan. 8 and 31, gathering responses from business leaders across Tennessee. Respondents represented a broad sample of businesses across all industries, ranging in size from fewer than 50 employees to more than 5,000.
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MEDIA CONTACT:
Stacy Estep (865-974-8304, sestep3@utk.edu)
Erin Hatfield (865-974-6086, ehatfie1@utk.edu)