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CEO Confidence Index April 2010

CEO Confidence Index is Feeling the Bumpy Road to Recovery

Chief Executive magazine’s CEO Confidence Index, the nation’s only monthly CEO Confidence Index, dipped in April, reflecting the economy’s bumpy road to full recovery. 

The Investment Confidence Index showed the largest decline of all of component sub indices – by 24.5% to 95.1. Access to capital remains a hurdle for many CEOs. Investment opportunities were rated “bad” by 39.7% of the CEOs polled by Chief Executive. One CEO voiced a common theme “Access to economically justifiable capital continues to be a deterrent in our appetite for investments and growth.” 

The Current Confidence Index, which measures CEO sentiment in the current quarter, fell 12.0% to 65.7. While this component of the index fell in April, most CEOs felt that while current conditions remain challenging, there was a feeling that better days lie ahead. One CEO commented, “Positive trends are developing. We remain cautiously optimistic”. Another CEO added, “In general the economy appears to have flattened out and is showing signs of doing better.” CEOs appreciate the road to full recovery will be a long one. One CEO cautioned, “These early economic signs of improvement are misleading. Though the stock market seems to be responding well to the recent environment, the data does not support the optimism”. 

The Future Confidence Index fell 7.8% to 113.3 in April. While the majority of CEOs (52.9%) anticipate growth in the economy over the next quarter, a sizable number (37.7%) expect no change (no growth, no decline). John Keffalas, President, Forbes Business Plan Advisors stated, “I believe the US economy will stagnate or even get worse over the next 3-4 years because there was too much over-building and speculation in so many parts of the economy and not just in the real estate and mortgage sectors”.   

The Employment Confidence Index decreased by 1.1%, falling to 82.6. Over ninety percent (90.6%) rated current employment conditions as “bad”. One CEO responding to the survey stated, “Recovery from the recession will be hampered until full-time, permanent, private-industry employment levels start increasing”. The importance of job creation remains a concern to CEOs, and could have short-term consequences; “I expect that if unemployment does not significantly improve by the end of 2010, the economy will begin to reverse its recent gains”. Another CEO saw a silver lining, “From an employer perspective, good employees are staying put and positions are easier to fill.”  

The Business Condition Index was the only component of the CEO Confidence Index to show a gain. The Business Condition Index rose a modest 2.4%, to 103.5. While signs of improvement are visible in the economy, there have been fundamental changes. “Things are improving. I do believe we will see a more frugal consumer and the lessons learned from the financial debacle will be hard to forget – much like how the depression era folk lived frugally most of their lives”. 

The decline in the April CEO Confidence Index, clearly demonstrates the road to recovery will be a bumpy ride. A look at the CEO Confidence Index over the last two years shows that we appear to have “bottomed out”.


CEO Confidence Index, April, 2010
Respondents:  137


March, 2010

April, 2010

Monthly Change(%)

CEO Index




Current Confidence Index




Future Confidence Index




Business Condition Index




Invest Confidence Index




Employment Confidence Index




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