After taking a slight step backward in February, CEO confidence ratings surged in March, to 7.41, up 6.0% from 6.99 in February, and up 4.8% from 7.07 in January (on a scale of 1 to 10 with 10 being the highest).
CEOs’ confidence in business conditions looking 12 months out also represents a big change from how they feel business conditions are right now. These same respondents rated current business conditions 6.77—an 8.6% gap between today and a year from now.
“As a middle-market CEO with a steadily growing company, I am counting on Trump’s tax revisions to spark new channels of growth,” one respondent said. This transportation CEO anticipates both revenue and profit growth above 20% over the next 12 months.
Richard Janezic, CEO of revenue and sales growth consultancy Ascenceo Revenue Sciences, believes business conditions are dependent upon several factors, including “how well Congress and [the] White House get along and accomplish healthcare and tax reform; material reductions against terror groups and lack of major terror attacks; low/no major economic global shocks; cybersecurity and digital infrastructure improvements.”
Of 12 sectors, CEOs in the Transportation industry showed the highest confidence over the last 60 days, with a 35% bump in their rating since January (from 5.40 to 7.29). Real Estate CEOs increased their rating by 31%, while CEOs in two other sectors—Advertising/Marketing/PR/Media/Entertainment and Government/Nonprofit—also rose more than 10%. Noticeably, none of the sector CEOs reported less confidence in March than in January. (The January survey was conducted prior to the swearing-in of President Trump.)
By Company Size
When analyzed by company size, there were clear differences. CEOs of mid-market companies showed more confidence than their smaller and larger counterparts, with the lower middle market (revenues between $10M and $99.9M) recording the highest confidence rating at 7.67..
Large companies showed the least confidence in future business conditions, with a rating of 7.11, probably because they are more impacted by global business conditions. Smaller company CEOs (those with revenues of < $10 million) were slightly more bullish than their large company peers with an average rating of 7.22.
Changes in regulatory policies likely had an effect on CEOs’ opinions, and will continue to do so going forward, but the overall trend is positive.