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CEO Confidence Index July 2007

However the same optimism doesn’t holds way over future conditions; most CEOs expect the current employment rates to remain unchanged in the next quarter

The Chief Executive magazine CEO Confidence Index, which measures the confidence of chief executives about five specific areas of the economy, rose for a second straight month in July, jumping by 8.5 points, or five percent, to 169.3 points.  The results of the July survey, conducted among 258 C-level executives, marked the second largest one-month boost to the Index since January of 2006, when the leading economic indicator hit an all time high. 

The Business Conditions Index, which rose by 12.3 points, or seven percent, led the sharp increase, followed by the Employment Index, which increased by 11.7 points, or six percent. 

In fact, the Employment Confidence Index has been increasing steadily in the past four months and “the unemployment rate is the lowest it has been in a long time.”  As such, the percentage of CEOs that expressed strong employment confidence reached a new high, hitting 59 percent, a level that has not been witnessed since Chief Executive Group began tracking these sentiments in October 2002.

However, when asked about their future hiring plans, most respondents, 46 percent, indicated that they expected the current employment levels to remain unchanged over the next quarter.

In respect to business conditions, more than half of the executives surveyed, 53 percent, said they would characterize current business conditions as “good.”  However, they were quick to add a caveat by indicating that “any activity that interrupts energy supplies, continues to stymie Congressional oversight, or affects public health (e.g., tainted food additives from China), could curtail progress and throw the economy into reverse.”

The worst performing of the component indices, the Investment Conditions Index, still rose this month, but only by 2.8 points.  Mark Renkert, chairman and CEO of Technology Group Partners, pointed out, “Investment monies are becoming more expensive and lenders more frugal.”

Polling this month was conducted prior to the sudden pull back the Dow Jones Industrial Average recently experienced after briefly hitting 14,000.

CEO Index, July 2007

Respondents: 258

 

 July 07

 Change from Prev Month

 CEO Index

 169.3

8.5

 Current Confidence Index

 215.5

10.2

 Future Confidence Index

 138.1

7.4

 Business Condition Index

 184.1

12.3

 Invest Confidence Index

 141.5

2.8

 Employment Confidence Index

 188.9

11.7

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