CEO Confidence Index, a leading economic indicator of executive confidence and the nation’s only monthly CEO Index, experienced a slight improvement in all of its indices with the only exception of Business Conditions Index in March.
In March, the CEO Confidence Index rose 2.4 points, or six percent, to 41.6 points. In addition, the Employment Confidence Index, a sub-index used to calculate overall confidence in the job market, increased 5.1 points, or 22 percent, to 28.2 points, the biggest percentage increase recorded in March polling. The second largest percentage gain was in the Current Conditions Index, which rose 5.8 points, or nearly 12 percent, to 54.9 points. Finally, the Investment Confidence Index rose 6.1 points, or 8.5 percent, to 77.8 points. The gains in the Future Confidence Index were negligible as the Index rose 0.2 points, or 0.6, to 32.7 points.
“After months of steady declines, it is hard to view these slight improvements in CEO confidence as a secure sign of stabilization,” said JP Donlon, Editor-in-Chief, Chief Executive magazine. “Confidence across the board is still hovering around its worst levels we’ve ever seen, and a significant majority of CEOs still expect the economy to get worse before it gets better.”
According to the CEO Index polling, CEOs predict the Dow to hit 6000 during this downturn and do not expect a turnaround until 2010.
“I see no underlying fundamentals to be encouraged about,” said Dan Lebish, President and CEO, United Concordia Dental and HM Insurance Group. “Whether you look at sales, production, housing starts, employment, or inventory levels, they all point to a continued recession/depression. In addition, the stimulus bill misses one of the critical factors causing this downturn a significant excess on the supply side due to new production capabilities in
In line with Lebish’s predictions, 73 percent of CEOs predict the economy will decline over the next quarter, while 75 percent expect the unemployment to increase.
“We continue to face a very turbulent economic environment,” continued Donlon. “It is impossible to tell how some of the current Administration’s policies will impact the economy. However, CEOs’ continued pessimism doesn’t send a positive signal, and we are not likely to see an upturn before their attitude changes.”
CEO Index, March 2009
Current Confidence Index
Future Confidence Index
Business Condition Index
Invest Confidence Index
Employment Confidence Index
CEO Index March Bonus Question
What do you think will be the lowest point the Dow will hit during this economic downturn?
When do you think the economy will begin to turn around?