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After a surge in optimism in July, CEO sentiment fell back to pre-vaccine levels in August due to a growing array of concerns, including the recent spike in Covid cases, supply chain disruptions, the potential for tax increases, inflation, rising government spending and tight labor markets. CEOs are now equally divided in their forecast for the future, with the same proportion saying conditions will worsen versus those who think it will improve.

Those are the key findings from Chief Executive’s latest poll of 316 U.S. CEOs, fielded from August 3-5, which show a significant reversal in CEO confidence versus prior month. CEOs’ assessments of current and future business conditions are now 6.8/10—the lowest they’ve been since March 2021 and November 2020, respectively.

While CEOs say they are now more confident in the current environment than they were back in January, their outlook for the future is down for the year. When looking at the business environment 12 months from now, America’s business chiefs say they anticipate demand will be strong but expect rising prices, rates and inflation will stifle growth.

“I’m concerned about federal government taxation of the business owners that we need in order for our economy, and innovation, to continue to flourish,” says JD Harris, CEO of Ascent Solutions LLC. “I also don’t think the current economic recovery can continue without some ‘penalty’ in the form of a recession, increased interest rates, etc.”

Jason Meyerhoeffer, president and CEO at Idaho’s First Federal Savings Bank, says there’s general momentum coming out of the pandemic but believes it is “tempered by the uncertainties of the pandemic, potential higher interest rates, misdirected regulation and continued fiscal stimulus/deficit spending.”

Thomas Mercaldo, president and CEO of Connecticut-based Aquinas consulting, says “I think we have a good positive stretch for another 6 months. However, supply chain issues, inflation, expected new taxes and government regulations, in my view, will all have a negative long-term effect on the jobs market and economy, so I think the long-term picture is a little less optimistic.” He forecasts business conditions to fall to a 5 out of 10 within the next 12 months.

“Demand is very strong, but willing workers are in short supply,” says Richard E Durst, president and CEO of Ohio-based refrigerated trucking company Arctic Express. “We’re turning down business every day because we don’t have enough drivers to move all the freight our customers want us to move. This economy more than anything needs folks to get off the couch and back to work,” he says.

John Gessert, CEO of Michigan-based consumer manufacturer American Plastic Toys, agrees hiring is a concern. He says he expects conditions to deteriorate to a 4 out of 10—“weak” according to our scale—by this time next year because of “the recent increase in variants, continued difficulty hiring and supply chain problems—specifically raw material prices.”

“Orders are increasing, but shipments [are] limited because of supply line problems obtaining material,” echoes Steven Holzman, president and CEO of Colonial Electronic Manufacturers. He, however, expects conditions to improve over the coming months. “It is anticipated that the current supply issues will be significantly improved in one year,” he says.

“I believe that the fundamentals of the economy are strong, but continued virus spread is holding us back,” says Marc S. Rowland, president of Tennessee-based architectural firm TMPartners, adding that he is “hopeful that we will reach heard immunity within the next six months, and the virus will start to wane.”

But even if many of the polled CEOs share the same concerns, they are now more divided than ever about what the future may bring: 34 percent expect business conditions to improve by August 2022 vs. 34 percent who expect they will deteriorate—and 32 percent forecast no change year over year.

The Year Ahead

Fewer CEOs polled are forecasting increases in profits and revenues over the next 12 months, down 6 and 2 percent respectively, to 75 and 83 percent since June. Nevertheless, those numbers are higher than where they were when we started the year—up 4 and 12 percent respectively—and well above where they were at this time last year: +65 and +92 percent.

Similarly, while only 55 percent are currently projecting to increase capex in the year ahead—down 9 percent from the previous month’s record jump—that is a 15 percent increase since January and a 68 percent climb since August 2020.

The same trend is observed with respect to hiring. 63 percent of CEOs plan to increase their hiring over the coming year, down 6 percent since last month but up 14 and a stellar 148 percent since January 2021 and July 2020.

Sector & Size View

All sectors but two—Media and Transportation—show declining confidence in August, a stark reversal from July when all but one were up. Last month, transportation CEOs were the only ones reporting a significant drop in optimism, which they said was caused by material and labor increases. This month, they cite the gradual stabilization of the supply chain and growing demand as reasons for their rating of 7.5 out of 10.

In the Media sector, which includes advertising, marketing and entertainment, polled CEOs say a healthy pipeline activity is driving their forecast. “Our clients are in industries that are seeing growth, and we are a barometer of what’s to come,” said Susan Quinn, co-founder, president and CEO of branding and digital agency Circle Studio.

Across all other sectors, however, the outlook dimmed in August. Six sectors posted double-digit declines month-over-month, with Pharma leading the charge (-19 percent). Those CEOs say Covid uncertainty and reticence of patients going into their doctors’ office in the current climate are the primary reasons for their rating of 6.5 out of 10—barely into “good” territory according to our scale and among the lowest ratings received in August.

The only sector with a lower score is Consumer Manufacturing, at 6.2/10. CEOs in that industry say the cost of raw materials, the recent increase in Covid cases, continued difficulty finding skilled labor, increased regulations and a lack of official rules for returning to work are all reasons for their 14 percent drop in optimism.

Year over year, the data isn’t as bleak. Five sectors are showing increased optimism compared to this time last year, while those that benefited the most from the Covid environment are now down from their August 2020 levels.

Forecasts by size are also down across all peer groups this month, with small company CEOs reporting the largest drop in optimism—down 9 percent since July—and the lowest rating, at 6.3/10. The reasons they give for this downgrade are similar to what other CEOs have cited: inflation, increase in Covid cases and restrictions, rising prices, taxes and regulations, and overall lack of labor.

Small company CEOs are also forecasting worsening conditions for the next year—and so are the larger company CEOs ($1 billion+). The only positive groups are midsized company CEOs, who expect business to improve by this time next year.

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 America, at organizations of all types and sizes, to compile our CEO Confidence Index data. The Index tracks confidence in current and future business environments, based on CEOs’ observations of various economic and business components. For additional information about the Index and prior months data, visit


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