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CEO Confidence Index February 2010

CEO Confidence Stumbles

Chief Executive magazine’s CEO Confidence Index, the nation’s only monthly CEO Confidence Index, stumbled in February, dipping 6.5 points (7.5%) to 86.1. 

All five components of the CEO Confidence Index fell in February. The Current Confidence Index took the biggest hit, falling 8.8 points (13.3%) to 66.4. The Current Confidence Index is a barometer of CEO sentiment on the current business environment. 

The Future Confidence Index dipped 4.8 points (4.5%) to 105.50. The gap between current and future confidence levels has reached -47.9, the lowest in the history of the CEO Confidence Index. This large point gap is an indication that CEOs see the business environment in the next quarter will be significantly better than the current business environment.  

The Business Condition Index dropped 6.5 points (7.3%), falling to 88.6. One CEO reflected, “The basic fundamentals for business growth are not here”. Another CEO stated, “The recovery will be very slow and very fragile”. 

The Investment Confidence Index lost 7.4 points (7.6%), landing at 97.0. CEO Glenn Gable commented, “Banks are still really tight. Until they loosen up it will be tough to get any growth”. A CEO in the construction industry lamented, “The banks are frozen with respect to lending especially in RED LINE industries”. While many CEOs expressed difficulties gaining access to capital, companies that have cash reserves see opportunity. One such CEO stated, “The market is bad, investment opportunities are great”.   

The Employment Confidence Index fell 5.3 points (7.75) to 69.2. While the Employment Confidence Index fell in February, this index remains 8.8% higher than at the close of 2009. “Employees are easier for us to hire today, both qualified and entry level. But “employment” for job seekers remains difficult,” commented one CEO. 

Jim Scatena, CEO of FloraCraft Corporation, stated “Consumers are gradually returning to the retail stores and we believe there will be low single digit comp sales growth in Q1”. Most CEOs believe the economy has reached the bottom and begun to turn around. The only remaining question is how fast the economy will grow. 

CEO Confidence Index, February, 2010
Respondents:  191

Index

January, 2010

February, 2010

Monthly Change(%)

CEO Index

92.6

86.1

-7.5%

Current Confidence Index

66.4

57.6

-13.3%

Future Confidence Index

110.3

105.5

-4.5%

Business Condition Index

95.1

88.6

-7.3%

Invest Confidence Index

104.4

97.0

-7.6%

Employment Confidence Index

74.5

69.2

-7.7%

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