ChiefExecutive.net

CEO Confidence Index April 2007

May 17 2007 by Chief Executive

The Chief Executive Magazine CEO Confidence Index booked additional losses this month, falling by 2.9 points to 157.2 according to 172 top executives surveyed in April. Most CEOs remain confident about the current conditions, but have serious concerns about the future.

The Future Confidence Index contributed most to the losses this month, falling by 8.0 points to 127.0. Many CEOs expressed concern over the future economic and political climate. One respondent noted, “the Iraq war as well as too much early attention to the 2008 Presidential race will distract lawmakers from dealing with important issues affecting business and capital sources and ultimately the long-term health of the U.S. economy.” Another CEO said, “Rising gasoline prices could slow consumer spending which has been very strong for a greater part of the economy.” To that end, only 35.3% of CEOs expect to increase capital spending at their companies over the next quarter, compared with 46.2% who planned to do so last month.

Additionally, more CEOs are starting to prefer current conditions to future conditions. A full 50% of CEOs rate current investment conditions as “good,” compared with only 42.7% who felt similarly in March. As a result, the Current Confidence Index was the only component index in the black this month, rising by 4.7 points to 201.9. The difference between the Current and Future indices is 74.9 points, and the gap has been growing for the past 4 years. “The U.S. Economy is precariously perched … and it is up to the private sector to innovate once more to be able to extend the growth run of the United States,” one executive implored.

The Employment Confidence Index also fell substantially in April, dropping by 6.9 points to 166.4. Only 28% of CEOs polled expect employment to rise at their companies over the next quarter. Voicing a common concern, one CEO pointed out that “the labor market for our business is extremely tight.”

Chief Executive Group also conducted additional polling this month to investigate how corporations make use of business schools as an educational tool. 53.9% of CEOs surveyed said they make use of business schools to train either themselves or their top management. “Business leaders in the U.S. are committed to constantly improve the education of themselves and their top managers,” said Edward M. Kopko, CEO of Chief Executive Group.

Respondents were also asked to rank America‘s top business schools according to their experience or perceptions. CEOs were also asked to make similar rankings in 2005. The top 2 schools according to CEOs have remained the same. CEOs rank Harvard University‘s Business School as the top business school, and the University of Pennsylvania‘s Wharton School as number two. One proponent of Harvard’s Business School said that “Harvard’s unique business case study approach is outstanding and highly informative.” While Stanford was ranked as number three and Northwestern number four in 2005, the two schools switched in position this year (see table below for full rankings). The University of Chicago Business School finished out the top 5.

The CEO Confidence Index normally is released on the third Tuesday of each month.  For additional information regarding the confidence of public- and private-company CEOs, details about regional CEO attitudes on employment, investment and business conditions, as well as confidence differences between service and non-service industry CEOs, visit our full report at http://www.chiefexecutive.net/ceoindex.

Chief Executive is a controlled circulation magazine that has been published since 1977. It reaches 42,000 chief executive officers and their peers, reaches a total readership of 170,000.  Chief Executive Group facilitates “Chief Executive of the Year,” a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of his or her peers.  A. G. Lafley, George David, Fred Smith, Bill Gates, John Chambers, Michael Dell and Sandy Weill are just some of the leaders who have been honored during the award’s 20-year history.  Chief Executive also organizes roundtable meetings and conferences to foster opportunities for top corporate officers to discuss key subjects and share their experiences within a community of peers.