Feb. 2016: Confidence in Future Business at a 14-Month Low

As the primaries heat up and the presidential candidate herd begins to thin out, CEOs appear to be in wait-and-see mode. When it comes to their confidence in how business conditions will be 12 months from now, they have less confidence today than they did in January 2015. And their confidence has dropped every month since then, to achieve a new low this month.

CEOs rated their confidence in future business conditions at 5.85 out of 10 points, with 10 being the highest. Compared with 6.71 for January 2015, that is a 12.8% drop in 14 months.

And revenue size does not make a difference in how CEOs feel. Whether respondents lead a large, mid-sized or small company, all CEOs appear to have the same concerns about future business conditions.

There are, however, extreme differences by industry. Consider, for example, the two polar end points: Not surprisingly, CEOs in the energy/utility industry have the dimmest outlook, having rated their confidence in business conditions a year from now at 5.31 out of 10. Comparatively, CEOs in the pharmaceuticals/medical products industry have extremely high confidence in future business conditions in their industry, having given a rating of 8.00, fully 51% higher than the collective rating given by energy/utility CEOs.

Of 16 industries, just five gave a rating of 6 or better, with Travel/Leisure, Healthcare and Manufacturing-Consumer Goods business leaders rating future business conditions 6.50, 6.20 and 6.15, respectively. Pharma/Medical Products was the only industry to give a rating above 6.5.