CEO Confidence Index October 2010
CEOs remain wary about the economy, but hopes for a better start to 2011 are rising.
November 4 2010 by ChiefExecutive.net
Chief Executive magazine’s CEO Confidence Index, the nation’s leading monthly CEO Confidence Index, remained flat in October, rising only 1.3% to 87.4.
The Current Confidence Index, a sub index that calculates CEO confidence in current employment, capital spending and economic conditions, fell to 56.2, a loss of 10.9%. In the survey, 76.8% of CEOs rate business conditions as “bad”, 19.0% rated business conditions “normal” and only 4.3% rated current business conditions as “good”.
The Investment Confidence Index lost 7.3%, decreasing to 94.0. The drop in this component of the index is due to several components. Nearly half of all CEOs surveyed (48.4%) rate the investment opportunities as “bad”. And, CEOs do not see investment conditions improving in the short term; 57.5% of CEOs reported no changes in their capital spending over the next quarter.
The Employment Confidence Index showed a modest increase, rising to 74.1,Â a gain of 4.5%. CEOs are nearly evenly split on employment with 19.9% of CEOs reporting plans to increase hiring over the next quarter, while 18.5% expect to decrease hiring over the next quarter. CEOs do not expect the November elections to have an immediate impact on hiring. Once CEO stated, “I believe the Republicans gaining control in Congress will have a positive impact on the economy and on hiring practices, but we are in for a very long period of slow growth in the U.S. and Europe.”
The Future Confidence Index, which measures CEO outlook on changes in employment, economic and investment opportunities over the next quarter, rose to 108.5, an increase of 5.5%.
The Business Condition Index showed the largest percentage gain, rising 9.2% to 91.5. Gains in this component of the index are the result of a larger number of CEOs expecting to see the business environment and economy to show gradual improvement over the next quarter. While 50% of responding CEOs predict no change in the economy over the next quarter, 34.4% forecast gradual growth – an increase of more than 7%.
John Hoeppner, President & CEO – NameQuest, Inc., commented “Republican control of Congress will restore confidence by acting as a counterweight to the tax and spend executive branch.” The question is: will the Republicans have the political will to reverse or slow our decline?
CEO Confidence Index,Â October, 2010
Current Confidence Index
Future Confidence Index
Business Condition Index
Invest Confidence Index
Employment Confidence Index