More than 250 CEOs of U.S. companies told Chief Executive last week that they expect overall business conditions 12 months from now to be “very good,” ranking them 7.62 out of 10. This confidence rating is one of the three highest on record since we began tracking it at the turn of the century, beaten only by the months of January (7.94) and July (7.83) of 2004.
Some industries are showing a significant improvement in confidence since the same time last year, with advertising and media up 24% year over year. According to the chairman and CEO of a mid-sized organization operating in that space, there are increasing opportunities for growth, thanks to companies allocating more funds to their marketing budgets in an attempt to try new media and stand out from the existing clutter of information.
Yet, what some view as signs of a growing economy and improving business environment, others view as inherent risks that could lead to a crash or debilitating volatility. Perhaps, as one CEO put it, perception is key? The NAFTA negotiations, interest rate projections, the price of oil, a bullish stock market, talks of immigration reform… Each of those arguments has been used by the CEOs in our poll to justify both sides of the ratings, particularly when it comes to assessing the impacts of the tax code overhaul and the consequences of protectionist policies on the dollar and exports.
“We have strong momentum going into 2018,” commented the CEO of an executive search company, “but I am concerned that there’s an irrational element driving the success of the stock market and the bubble will burst in a big way within the next six to 18 months.”
A managing partner in the same sector shared those same concerns for the long-term. “While pieces of support are coming together in the U.S. for businesses…it is likely that whatever additional progress is made domestically [regarding] taxes, regulation, etc. will be offset by global markets.” Nevertheless, this chief executive is forecasting his company’s revenues to grow more than 20% over the next 12 months, supported by increases in headcount, capital expenditures and profits.
It appears there is indeed strong momentum that most companies are capitalizing on at this time, and optimism is feeding optimism—in both business and consumer confidence. Whether one believes the change in the White House is responsible for this resurgence has almost become a moot point; change is most often refreshing, and most CEOs seem to now be faced with a different kind of challenge: finding the right avenues to deploy their cash for growth and invest their newfound capital back into the country’s economy.
About the CEO Confidence Index
The CEO Confidence Index is America’s largest monthly survey of chief executives. Each month, Chief Executive surveys CEOs across corporate America, at organizations of all types and sizes, to compile our CEO Confidence Index data.