CEO Confidence Steady, But Stays Weak

The CEO Confidence Index, Chief Executive’s monthly gauge of CEOs’ perceptions of overall business conditions, has leveled out after a long year of decline.  Confidence in overall business conditions remained at a low 4.88 out of a possible 10. This has been a 23.6 percent drop since the Index’s 2011 high of 6.39 in February. Fewer than 31 percent of chief executives expect business conditions to be at least ‘good’ over the next year.

Businesses’ main indicators of health remain similarly pessimistic to the attitudes of recent months. Almost half of all CEOs expect not to hire over the next year, but only 19 percent of CEOs expect to downsize their workforce.

These business leaders do, however, expect to see some growth in a few key areas: 54 percent expect an increase in revenue, 41 percent expect an increase in capital expenditures, 46 percent expect an increase in profits and 32 percent expect to expand their workforce.

CEO sentiment remains frustrated with government regulations and policies. One CEO said, “Stop punishing and demonizing capital investors, and they will invest capital. This will create companies and jobs. It is not rocket science. In a hostile environment, people lock down and hold onto their money for the uncertainty that lies ahead.”

One CEO sees a strong conflict between an economic recovery and election year politics, “I see conflict between the recovery of the economy and the positioning for the upcoming election. Although it’s a shame that it happens, I see the parties sacrificing the good of the economy to achieve gains in the election. I’d prefer the few statesmen in congress and in party leaders take the higher road in helping people put their lives back together.”

CEO Confidence Index — October 2011

Respondents: 247

What do expect overall business conditions to be like one year from now on a 1 -10 scale? (10 = Excellent)

What is your assessment of current overall business conditions on a 1-10 scale? (10 = Excellent)

Over the next 12 months, what changes do you forecast for your firm compared to the past 12 months?