Worries of Recession Wane for Tennessee Business Leaders

A new survey from the Boyd Center for Business and Economic Research shows business leaders are optimistic about the economy

October 5, 2023

Fewer business leaders in Tennessee are worried about a recession, according to a new survey from the Boyd Center for Business and Economic Research at the University of Tennessee, Knoxville’s Haslam College of Business

Less than a quarter of respondents to the August Tennessee Business Leaders Survey said there’s more than a 50% chance the economy will fall into recession, and a majority of business leaders put the likelihood at less than 25%. In last year’s survey, only 16% of those surveyed thought the chance of a recession was less than 25%, and 56% believed the chance was greater than 50%.

Bar graph: What are the chances that the U.S. economy will fall into a recession this year? 39.9% say 0-25%, 37.3% says 26-50%, 17% say 51-75%, 5.9% say 76-100%

Confidence in Tennessee’s Economy

When asked if they expect Tennessee’s economy to outperform the U.S. economy over the coming year, 73% of this year’s respondents said yes. Over half of respondents attributed Tennessee’s economy to good business investment in the state, and almost 70% said the state’s government is doing an excellent or good job of creating a solid business environment.

“The optimism about our state’s economy, as well as the lowered fear of recession, are both very encouraging to see,” said Don Bruce, director of the Boyd Center. “That confidence among business leaders is a reflection of the work our state is doing to encourage strong economic growth in Tennessee.” 

Nearly three-quarters of survey participants said Tennessee is heading in the right economic direction, and 62% said enhanced workforce and infrastructure would help the state even more. Almost 40% said the state would benefit from better technology infrastructure, and 24% listed energy infrastructure as an additional area for improvement. Business leaders from West Tennessee were more likely to list business development incentives (47.8%) than those from Middle Tennessee (29.2%) or East Tennessee (26.8%). 

When asked about the U.S. economy, respondents were split, with 38% believing it is in worse shape than last year and 34% believing it is better. Respondents were more pessimistic looking forward, with 44% saying they expect the U.S. economy to worsen over the coming year.

Adjustments from Inflation

Tennessee businesses are still feeling the effects of inflation, with 66% of business leaders saying they’re charging higher prices and seeking new supply chain opportunities to lower costs. Over 50% said they’ve increased their use of artificial intelligence, and 85% reported offering higher wages to employees. Survey respondents also reflected on more effects of inflation, as 12% said they had been forced to lay off employees and 9% said they had closed stores or offices.

Business leaders are optimistic about their outlook for the coming year, with half expecting their revenues to grow and 42% expecting profitability to increase, as well. Over half listed adverse economic conditions as a top concern for their businesses, with government regulation (41%), human resources (32%) and global political instability (28%) also among the top responses. Business leaders from East Tennessee were more likely to list supply chain issues (29%) as a top challenge for their business than those in West Tennessee (17%) and Middle Tennessee (15%).

Retaining the Workforce 

Around 70% of those surveyed said there are not enough appropriately trained workers, and 58% said the state needs to improve training and education opportunities. Over half of respondents reported difficulty retaining workers, with the cost (47%) and availability (28%) of housing in Tennessee listed as top factors. Cost and availability of childcare were listed by roughly a quarter of business leaders across the state, and West Tennessee business leaders were more likely to list school quality and substance abuse issues as factors.

Bar graph: Which of the following has impacted your business's ability to attract and/or retain workers? (Respondent were able to select up to 3.) Cost of housing: 46.5%, availability of housing: 28%, other: 27.4%, cost of child care services: 26.8%, availability of child care services: 23.6%, quality of local schools: 17.8%, substance abuse issues: 17.2%, mental health issues: 12.7%.

About the Boyd Center

The Boyd Center, housed in UT’s Haslam College of Business, administers the Tennessee Business Leaders Survey biannually. Business leaders from across the state responded between August 1-23, 2023. The full set of survey responses is available on the Boyd Center website.


Cindi King (865-974-0937, cking126@utk.edu)

Erin Hatfield (865-974-6086, ehatfie1@utk.edu)