Chief Executive magazine’s CEO Confidence Index, the nation’s leading monthly CEO Confidence Index, increased 14.7 points (14.4%), rising to 102.1 following the results of the November elections.
All five components of the index showed double-digit gains in November. “I expect overall CEO confidence to improve substantially due to the recent election results”, stated Tim Koltek, CEO, Terrapin Energy.
The Current Confidence Index, a sub index that calculates CEO confidence in current employment, capital spending and economic conditions, showed the most significant gains, rising 14.4 points (20.4%) to 70.6. The Current Confidence Index has been the lowest scoring component of the index in 2010, reflecting uncertainty with the Administration.
The Employment Confidence Index gained 14.2 points (16.1%), landing at 88.3. The increase in this component of the index reflects a slowing in the rate of job loss and an increase in rate of job creation. The number of CEOs expecting an increase in unemployment for the next quarter decreased from 18.5% in October to 10.7% in November, And, CEOs expecting job creation over the next quarter increased from 19.9% in October to 26.8% in November. One CEO stated, “If Obama extends the Bush tax cuts across the board this action alone will create jobs and stimulate the economy.”
The Business Condition Index, a sub index that compares CEO sentiment on current conditions to their expectations for the next quarter, rose 16.3 points (15.1%), to 107.8.
The Investment Confidence Index gained 13.7 points (12.7%), rising to 107.7. “Now the mid-term elections are over, we should see some adjustments in the market and capital investment to reach broader sectors and organizations so that current employment conditions can improve.”
The Future Confidence Index, which measures CEO outlook on changes in employment, economic and investment opportunities over the next quarter, rose 14.8 points (12.0%), rising to 123.3.
While the elections are over, some CEOs believe there are still tough times to come. Congress and the Administration need to take immediate steps to show they can work together to further reduce uncertainty and improve the business climate. And, a little PR from the Administration would help, too. “The market place is better than the statistics indicate. Washington should ‘talk up’ the economy rather than all the doom and gloom.”
CEO Confidence Index, November, 2010
Current Confidence Index
Future Confidence Index
Business Condition Index
Invest Confidence Index
Employment Confidence Index