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CEO Confidence Index December 2009

CEO Confidence Index Shows Modest Gains in All Components

Chief Executive magazine’s CEO Confidence Index, the nation’s only monthly CEO Confidence Index, surged in December. The CEO Confidence Index gained 9.2 points (10.8%), rising to 85.4. 

All five components of the CEO Confidence Index showed gains ranging from 6.9% to 15.9%. The individual components of the CEO Confidence Index fluctuated in November, reflecting continued uncertainty in the business environment. Surprisingly, the component that showed the largest percentage gain in December was the Employment Confidence Index. 

The Employment Confidence Index has been the worst performing component of the index, reflecting the highest unemployment rate since 1982. The Employment Confidence Index rose 15.9% to 63.60 in December. While an improvement, the high unemployment rate remains a hurdle to full recovery.  One CEO commented, “The job market is extremely depressed right now.” Another CEO added, “I think we are several quarters away from companies beginning to rehire”. Many CEOs are taking advantage of the skilled labor pool, and making strategic hires. Many CEOs commented on the wide availability of skilled labor, “The talent pipeline is rich for those willing to make appropriate trade-offs or investments.” The Employment Confidence Index  is an early indicator of changes in the employment rate 6 months in the future. 

The Current Confidence Index showed a gain of 8 points (12.6%), rising to 63.60. This increase reflects more of a stabilization than an improvement, offsetting November’s loss of 12.2 points. The President of one Midwest firm stated, “Isolated markets and segments are improving. There is no consistency in the growth company-wide, or over time yet.” 

The Investment Confidence Index gained 11.2 points (11.1%), recovering from November’s loss of 8.7 points. The increase raises the Investment Confidence Index to 101.1 points. CEO investment sentiment is similar to their hiring sentiment. One CEO told Chief Executive, “We are hiring and investing strategically. While we are continuing to improve wages and benefits to our current employees, we are doing so under tight controls”. 

The Future Confidence Index increased 10% to 100.1 points. Many CEOs see conditions improving, but are cautious in predicting the timeline. One CEO commented, “I think we are several quarters away from companies beginning to rehire”. Another CEO provided a similar sentiment, “I don’t see things improving until summer at best”.  

The Business Conditions Index showed the smallest percentage gains, rising 6 points (6.9%) to 86.5. This reflects the current high unemployment rate, and the lack of access to capital business leaders continue to face. While many believe the worst is behind us, uncertainty remains strong.  One CEO stated poignantly, “We continue to see a very challenging operating environment”. 

Perhaps the economy has passed the low point and is beginning to recover. Certainly, there remain many hurdles to be overcome, but a change seems to be in the air. One CEOs comments provided a ray of hope, “While not entirely reflected in indices, there appears to be a much more positive attitude and expectation of better times ahead”.

CEO Confidence Index, December, 2009
Respondents:  195


November, 2009

December, 2009

Monthly Change(%)

CEO Index




Current Confidence Index




Future Confidence Index




Business Condition Index




Invest Confidence Index




Employment Confidence Index




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