Business Confidence in US Economy Drops to Lowest Level since 2009
Location: Chicago
Author:
Kristi Grgeta
Date: Friday, November 4, 2011
In addition, U.S. business leaders anticipate continued economic struggles. Nearly half of surveyed business leaders expect the economy to worsen in the months ahead, almost triple the percentage from just one quarter ago.
“Economic uncertainty is bad for business,” said Stephen Chipman, Grant Thornton’s CEO. “Confidence in the prospect of an economic recovery has nearly disappeared in the past quarter. Uncertainty about global economic policy and sovereign debt are weighing on the business decision-making across the country. Business leaders are waiting for a sign that there will be some stability out of Washington and the European Union.”
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11/2008 |
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2/2009 |
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5/2009 |
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2/2011 |
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5/2011 |
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8/2011 |
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Believe U.S. economy will improve |
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13% |
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17% |
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45% |
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64% |
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45% |
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18% |
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Believe U.S. economy will get worse |
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63% |
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49% |
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13% |
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4% |
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12% |
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46% |
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When asked what public policy initiative would make business leaders most optimistic about the country’s future, a job creation program was chosen 2 to 1 over deficit reduction and 5 to 1 over a reduction in the effective corporate tax rate.
Please rank in order the public policy initiatives listed below that if adopted would make you most optimistic about our country’s future? Rank from 1 to 3 with 1 being most optimistic and 3 being least optimistic.
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Public policy initiative |
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Most Optimistic |
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Least Optimistic |
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Job creation |
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57% |
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15% |
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Deficit reduction |
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32% |
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24% |
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Reduction in effective corporate tax rate |
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11% |
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61% |
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The economic pessimism is draining confidence for the nation’s business leadership. According to the Index, there is a 30% drop in the plans to increase staff and a 108% increase in plans to lay off employees in the next six months.
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11/2008 |
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2/2009 |
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5/2009 |
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2/2011 |
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5/2011 |
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8/2011 |
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OVERALL Business Optimism Index* |
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35.6 |
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37.6 |
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54.5 |
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69.7 |
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62.6 |
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46.1 |
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Very or somewhat optimistic about own business |
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44% |
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43% |
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62% |
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87% |
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79% |
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60% |
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Very or somewhat pessimistic about own business |
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57% |
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57% |
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38% |
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13% |
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20% |
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40% |
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Plan to increase staff |
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15% |
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9% |
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20% |
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49% |
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40% |
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28% |
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Plan to decrease staff |
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43% |
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45% |
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30% |
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10% |
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12% |
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25% |
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*All questions refer to the next six months. |
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