CEO Confidence Index April 2009
May 7 2009 by ChiefExecutive.net
CEO Index, the nation’s only monthly CEO Index, made a visible recovery in April based on the responses collected from 491 top executives. In April, all components of the CEO Index increased after an extended period of record declines.
The CEO Confidence Index rose 60 percent, or 27 points, to about 70 points in April. Of the five sub indices, the Business Conditions Index, used to measure the confidence in business conditions, made the biggest gains, jumping more than 300 percent, or 41 points, to 53 points.
The second biggest gain was made in the Future Confidence Index with a more than 100 percent increase, which brought the sub index to 70 points from 33 points in March.
Finally, the Employment Confidence Index, a sub-index used to calculate overall confidence in the job market and that has been a leading indicator of employment conditions, increased 60 percent, or 18.5 points, to approximately 47 points.
“CEOs have started to gain confidence in the economic environment, which is evident from the significant recovery that the index has shown,” said JP Donlon, Editor-in-Chief of Chief Executive magazine. “The jump is an indication that the market has bottomed out and that a slow recovery may be close.”
According to the survey, many CEOs believe that if they can use the current economic conditions to their advantage they will come out successful in the end. As such, this month, 51 percent of respondents rated current investment opportunities as “good,” a nearly nine percent increase from last month. While 36 percent said they would consider them “bad,” an 11 percent decrease from previous polling. “I am confident our economy will come back, but not in the next quarter. The next quarter has nothing to do with optimism. It’s too short a view and will create panic,” said one respondent wishing to remain anonymous.
In additional polling, 43 percent of CEOs surveyed believe that the revised Republican proposal that would call for $3.1 trillion in new borrowing is more likely to support business growth and job creation. By contrast, only 16 percent of the CEOs said the revised Democrat proposal, which would require the nation to borrow about $4 trillion over the next five years, would help support business growth and job creation. One respondent noted, “This is too large a debt load for our economy. Now that various stimulus initiatives have been put in play, we need to allow these efforts to blossom, before adding more programs.”
CEO Index, April 2009
Current Confidence Index
Future Confidence Index
Business Condition Index
Invest Confidence Index
Employment Confidence Index