Employee confidence soared in March after the start of military action in Iraq,
according to the Gallup/UBS Employee Outlook Index, a joint effort of The Gallup
Organization and UBS, a financial-services firm. Currently at 59, the index
was established in April 2002 with an initial baseline of 72.
The Employee Outlook Index survey revealed a 25-point jump in employee optimism
between March 5 and March 24. The Index fell to an all-time low of 47 on March
5. On March 24, five days after the start of military activity, the index soared
to 72 -- matching the initial index number for the first time.
All three dimensions of the Employee Outlook index increased sharply following
U.S. military action in Iraq.
- Present Company Conditions Index - 69 points at the beginning of March.
84 at the end of March (average 77 points).
- Future Company Conditions Index - 47 points at the beginning of March.
75 at the end of March (average 60 points).
- Job Security Index - 25 points at the beginning of March. 57 at the
end of March (average 41 points).
"The late March increase in the index stands in sharp contrast to the
declines recently reported in some other key consumer confidence measures,"
says Gallup Chief Economist Dennis Jacobe. "As happened following September
11, Gallup is seeing an economic 'rally effect' in response to the war with
Iraq. We believe both employee and consumer confidence increased as the war
began and will do so once again when the war is successfully concluded."
When asked to theoretically choose between a 10 percent across-the-board layoff
and a 10 percent across-the-board cut in pay, if their company were faced with
a serious financial problem, more than half, 61 percent opted for the 10 percent
cut in pay, as compared to 71 percent in February. The 10 percent layoff option
was chosen by 37 percent of respondents in March while only 28 percent chose
layoffs in February.
A majority of those surveyed, 78 percent, report that in February their companies
did not increase security measures following the federal government's decision
to raise the terror alert to orange from yellow. Some 57 percent of employees
say that their company has not upgraded security since September 11.
Results for the Gallup/UBS Employee Outlook Index are based on telephone interviews
conducted March 3 - 5, 2003 and March 24 - 25, 2003 with a randomly selected
national sample of 696 adults who are employed with non- governmental, for-profit
companies having five or more employees, 18 years and older.