Emerging optimism for 2021: The latest Harris Poll

The exclusive Chicago Executive Pulse survey, conducted in partnership with Crain’s, shows Chicago-area execs are starting to see light at the end of the tunnel.

By William Johnson | Crain’s Chicago Business

Thanksgiving has come and gone, kicking off the final stretch of the strangest year in memory. The ’20s commenced with a global pandemic, social unrest, an economic roller coaster ride and a presidential election that extended into overtime. A new year beckons, bring the possibility of a fresh start and a return to something resembling normalcy.

Here in the Chicago area, business leaders are exhibiting signs of emerging optimism for 2021, specifically on the economy and President-Elect Joe Biden’s administration, according to the second wave of the Harris Poll Chicago Executive Pulse survey. In partnership with Crain’s Chicago Business, we surveyed over 200 area business leaders (owners, C-suite executives, vice presidents and directors), asking them about their firm’s performance and the city in which they operate. As we field on a quarterly basis, the objective is to measure the city’s business environment over time while also drilling into the issues of the moment.

Local executive expectations remain positive with 44 percent reporting Chicago’s economy will be in good or very good condition in six months, and 48 percent saying the same of the broader U.S. economy. This positive expectation has manifested in our business leaders focusing on economic issues at home while they remaining in a holding pattern as the final acts of 2020 play themselves out.

For the moment that sense of stasis is balanced against an incipient but measurable confidence about what is set to occur in the nation’s capital. Biden ran a deliberately centrist campaign and often talked about being president of the entire country rather than just catering to his political supporters, positions which appeal to pragmatic centrism of local business leaders.

The majority of Chicago executives expect that the Biden administration will positively affect job growth (57 percent as opposed to only 22 percent who think it will have a negative effect) and reopening the economy (55 percent as opposed to 31 percent who disagree). This is not surprising—Moody’s Analytics assessed in September that a Biden victory would be good for economic growth. Biden’s decision to nominate the well-respected Janet Yellen, a former chair of the Federal Reserve, as Treasury secretary only reinforces the conviction. Strong pluralities of Chicago-area business leaders are also optimistic about the new administration’s effect on public market performance (48 percent positive versus 27 percent negative), trade relations (48-24), intellectual property protection (49-20) and healthcare (46-23). In fact, of eight economic areas Harris asked about, these leaders  only narrowly disputed the corporate tax system (39-38). No shock there either: Biden promised to raise the corporate tax rate.

The brightening sense of optimism nationally syncs up well with business leader’s priorities here at home. They cite employment as the biggest issue holding the city back (22 percent mentioned it, a three percentage point increase since our last poll, in August) and the economy as the biggest issue holding local business back (25 percent, up five percentage points from August). Back in late summer, in the throes of the campaign to pass Pritzker’s progressive income tax proposal, taxes were the top issue. But they have faded now that voters have rejected it.

Those views are no doubt informed by their own experiences. A greater number of business leaders reported rising (47 percent) or stable (32 percent) revenues over the last month than in August when 37 percent said revenues had risen and 29 percent said they had stayed the same. By contrast the number who reported revenue declines fell sharply down to 22 percent from 37 percent in August.

Nevertheless, roughly the same number of leaders now say that business conditions have deteriorated over the last month as in August (55 percent down from 57 percent). And plans have changed little about going back into the office: only 58 percent of leaders plan to have a quarter of workers back in the office within 30 days.

But broader economic issues moving to the fore, along with an underlying sense that the national climate is likely to improve, generates an unmistakable momentum of positive expectations. It’s checked by a still-rising pandemic but as conditions improve, with the help of three promising vaccines candidates, it will build a tension and then a torrent. The next year could see a fast-developing, explosive change – that marks a long-sought return to normalcy.

Read the full story at Crain’s Chicago Business.