The Chief Executive magazine’s CEO Confidence Index rose by over 10 percent in August according to 292 top executives surveyed. The current CEO Confidence Index stands at 92.6, the highest since May 2008 when it was at 95.8. All component indices, which are used to track confidence in more targeted parts of the economy, rose in August as well.
The Investment and Future Confidence Indices, which rose by 12.0 and 11.9 points, respectively, led the gains. On the investment front, 52 percent of respondents said they expect capital spending at their company to stay the same. This is the highest percentage recorded since April 2007, which is an encouraging indication that CEO confidence is slowly improving.
Survey respondent Micah Johnson, CEO of the Entegy Group, noted, “I believe the economy is a little better than the media would have everyone believe. Overall, I believe we will continue to grow and the economy will improve.”
Moreover, the Employment Confidence Index rose by just 8.2 points in August, and was the least improved index of all the components. Fewer than 7 percent of respondents said they would characterize employment conditions as “good”, while over 42 percent said they would consider them “bad.” Similarly, while just 11 percent of CEOs said they expect employment to rise over the next quarter, 46 percent think it will fall.
“This is the lowest level of bearish CEOs we’ve seen over the past six months,” said Edward M. Kopko, CEO and Publisher of Chief Executive magazine. “However, while the index numbers are encouraging, the market remains soft and CEOs remain pessimistic about what the future holds.”
Lag analysis of the Employment Confidence Index, which has been remarkably accurate at predicting employment trends for up to 6 months, shows that unemployment is expected to reach or surpass 6 percent in the coming months.
CEO Index, August 2008
Current Confidence Index
Future Confidence Index
Business Condition Index
Invest Confidence Index
Employment Confidence Index
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