Although CEO Confidence dropped for the third month in a row, it fell less than one- half of a point, from 159.7 to 159.4. All other main indices in the CEO Confidence Index showed the same trend, although the Business Condition Index dropped a little more than normal and the Investment Index increased.
Despite uncertainty about the presidential election, there are signs of hopeful news on the horizon. Not only did CEOs’ investment confidence rise, the results were stronger among big companies: a 7.6-point difference between investment and business condition confidence (with investment being more positive) compared with an 8.8-point difference between investment and overall confidence (in the same direction). There was no noticeable change in the same categories among small companies.
CEOs are showing a serious interest in increasing tech spending in the near future, as an additional poll conducted by Chief Executive group shows over 70% CEOs are intending to increase tech spending in the next year, while 25% expect to increase spending by over 10% of their current budget and 26% expect to increase spending by 5 to 9%. Conversely, only about 8% of executives surveyed expected to decrease spending over the next year. The top three areas for CEOs to add additional resources are hardware (17.45%), security (15.88%), and software integration (15.76%).
All this spells good news for not just the tech sector, as statistical analysis shows that job growth is linked to corporate investment, accounting for 35% more of the change in job growth than changes in profits do. As a result, the desire of CEO’s to increase investment in technology spells good news for an economic climate conducive to job growth and stock market gains.
“Recent strong showings in the investment portion of the CEO Index are giving some serious indications that other things besides corporate profits and legislation affect job growth,” says Edward M. Kopko, chairman and CEO of the Chief Executive Group. “Our research shows tracking corporate investment is twice as helpful in predicting job growth than tracking corporate profits proves to be. As a result, we believe that there is serious evidence to suggest employment will increase in the near future.”
In addition, the shrinking gap between current and future confidence suggests momentum is building for the future. Since January, 2004, the Future Confidence Index has stayed below the Current Confidence Index, indicating CEOs are less optimistic about the future climate than the current one. This difference was greatest in June, 2004, when future confidence was a full 30 points below current confidence. Since that month, the gap has been shrinking (to 23.3 points this month), implying that executives are getting more optimistic about the future.
“It is clear that our economic engine has been slowed the past few months from its previous robust growth, but we see good news to come,” says William J. Holstein, editor-in-chief of Chief Executive magazine. “With the election coming to an end and signals pointing to an optimistic future, we might be able to assume some of the fog has cleared.”
The CEO Confidence Index is released on the third Tuesday of each month. For additional information regarding the confidence of public- and private-company CEOs, details about regional CEO attitudes on employment, investment and business conditions, as well as confidence differences between service and non-service industry CEOs
Chief Executive is a controlled circulation magazine that reaches 42,000 chief executive officers and their peers. It is published 10 times a year and reaches a total readership of 170,000. Chief Executive Group facilitates “Chief Executive of the Year,” a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of his or her peers. Fred Smith, Hank Greenberg, Bill Gates, John Chambers, Michael Dell and Sandy Weill are just some of the leaders who have been honored during the award’s 17-year history. Chief Executive also organizes roundtable meetings and conferences to foster opportunities for top corporate officers to discuss key subjects and share their experiences within a community of peers.
In comparison to your technology spending in 2004, will your spending in 2005:
Increase by more than 10% 93 25.6% Increase by 5-9% 95 26.2% Increase by 1-4% 71 19.6% Stay the same 74 20.4% Decrease by 1-4% 16 4.4% Decrease by 5-10% 14 3.9%
Please check the areas where additional resources will be allocated in 2005.
117 14.18% Enterprise software Network development 119 14.42% Hardware 144 17.45% Manufacturing Automation 56 6.79% E-commerce 104 12.61% Security (technology protection) 131 15.88% Software Integration 130 15.76% Other 24 2.91%
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
