Home » CEO Confidence Index » CEO Confidence Index December 2008

CEO Confidence Index December 2008

In Search of the Interminable Bottom CEOs See Flat Dow, Higher Oil and Interest Rates

The Chief Executive Magazine’s CEO Index, the nation’s only monthly CEO Index, sunk to another all-time low in December, according to 245 top executives surveyed. Executive confidence in America‘s economy is under 50 percent of what it was just three months ago, and less than 25 percent of what it was a year and a half ago. In all the turmoil, one CEO tried to keep a sense of levity: “Sooner or later there will be some good news.”

The CEO Confidence Index currently stands at 40.9 points, down 9.1 points, 18 percent, from 50.0 points back in November. The Employment Confidence Index, a sub-index used to calculate overall confidence in the job market, dropped 38 percent, to 22 points in December.

“The recent trends we are seeing in confidence are truly unprecedented. We were concerned when confidence was at parity with 2002 levels. Now it’s 60 percent below that,” said Edward M. Kopko, CEO and Publisher of Chief Executive Magazine. “We believe eight percent unemployment is right around the corner,” Kopko concluded.

Over 90 percent of respondents said that current employment conditions were “bad,” and the same was true for their position on overall business conditions. Furthermore, almost 80 percent of respondents said they expect employment to fall over the next quarter. Maintaining a quite bearish outlook, one executive said, “It’s going to get worse before it gets better,” while the other went as far as to say, “The economy is nearing a total collapse.”

The Investment Conditions Index was the best performing of all the components, even though it also fell substantially in December (by almost 13 percent). Still, 38 percent of respondents said they would characterize investment opportunities as “good,” perhaps a signal that the markets may be at their lowest.  However, some CEOs were still wary of a recovery anytime soon, one said, “Yes we have seen the bottom but fear is still driving consumers’ thoughts.”

CEOs attributed a variety of factors to America‘s economic unraveling: One CEO said, “We brought it on unto ourselves by ignoring the balance of trade and global outsourcing of jobs and technology.”  Looking forward, CEOs see trouble in the credit markets and voice “real concern about the spiral effect of the de-leveraging.”

Given the radical swings in the Dow, interest rates, and the price of oil recently, Chief Executive conducted additional research this month to get CEOs’ predictions for these key economic determinants.

In this polling, the CEOs said they expect the Dow, at 8772 when polling was conducted, to remain relatively stable. The average prediction for the end of 2009 was 9253, or up five percent. CEOs also predicted that the interest rates, currently at 0.25 percent, will rise to somewhere near 1.19 percent over the next year. Lastly, they estimated the price of oil to rise by about 50 percent to $55 per barrel. CEO predictions last year were unreasonably bullish, substantially overestimating the value of all three indicators (for full results, see below).

CEO Index, December 2008
Respondents: 245


December, 2008

November, 2008

Monthly Change

CEO Index




Current Confidence Index




Future Confidence Index




Business Condition Index




Invest Confidence Index




Employment Confidence Index




Predictions For 2009





Dow Jones




Price of Oil




Fed Funds Rate

0 %



Predictions For 2008





Dow Jones




Price of Oil




Fed Funds Rate

1.2 %



About admin