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CEO Confidence Shaky But Holding

CEOs look to direction of newly elected house.

Chief Executive magazine’s CEO Confidence Index, the nation’s leading monthly CEO Confidence Index, gained a little over one point in December, rising to 103.3. The small growth follows strong gains in November.

The Investment Confidence Index showed the strongest gains, rising 4.1% (4.6 points) to 112.3. CEO involvement in capital projects has increased over the last two years. CEOs continue to scrutinize capital investment projects closely. One CEO commented, “If a capital project meets our financial hurdles, we’ll make the investment.”

Several CEOs are seeing signs for both short-term and long-term improvements in the economy. These changes were demonstrated by small gains in both the current and future confidence indices.

The Current Confidence Index rose 3.6% rising to at 73.2. “We see things improving. The supply chain is getting filled up again and companies are anticipating improved sales so they are starting to order product,“ stated one executive.

The Future Confidence Index held steady, increasing 0.2% to 123.6. Signs are out there showing that the economy will improve within the next 6 months. People seem to be in better spirits for the first time in a while.

The Employment Confidence Index lost half a point, falling to 87.7. Most CEOs are cautious on hiring before sales ramp up. Technology and engineering sectors are entering a slow growth mode. One CEO stated, “We are hiring in limited situations. Our focus has been on technical and engineering positions while filling a few factory jobs as demand increases.” Another executive added, “We are investing in new technology for which there is demand. This is creating a demand for manufacturing employees and some engineers.”

The Business Condition Index lost a little over one point (1.2) falling to 106.6. This index reflects the continued uncertainty in the political environment. The impact of the political uncertainty was succinctly summarized by one CEO, “When the government does not have a clear view of how they are going to govern it is tough for business owners to plan how they are going to manage.”



CEO Confidence Index, December, 2010
Respondents:  144

Index

November, 2010

December, 2010

Monthly Change(%)

CEO Index

102.1

103.3

1.2%

Current Confidence Index

70.3

73.2

3.6%

Future Confidence Index

123.3

123.6

0.2%

Business Condition Index

107.8

106.6

-1.1%

Invest Confidence Index

107.7

112.3

4.1%

Employment Confidence Index

88.3

87.7

-0.7%

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