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CEO Optimism At Lowest Level Since Fall Of 2019

Chief Executive’s November CEO Confidence Index shows optimism among America’s CEOs on the decline, as their rating of business conditions one year out drops to two-year low.

CEO optimism in the business environment 12 months from now continued to decline for the third consecutive month in November. At 6.4, the leading indicator is at multi-year lows, fueled by obscurity surrounding supply chains, inflation, increased taxes and government spending, which, CEOs predict, will cause consumer demand to tamper out. Their outlook for business by November 2022 is now 5 percent dimmer than what it is today.

Those are the key findings from Chief Executive’s latest poll of 169 U.S. CEOs, fielded November 2-4, which asks America’s business chiefs to rate the environment today and 12 months out based on their assessment of business conditions—and forecast the impact on their company’s growth. This month, CEOs’ rating of current business conditions remained unchanged since October, at 6.7 out of 10, according to the 10-point scale. Strong consumer demand, as well as the easing of government mandates both in the U.S. and abroad are encouraging business growth in the present, CEOs say.

Their rating for business conditions 12 months out, however, continued to fall for a third consecutive month, down to 6.4, nearly 4 percent lower than it was just one month prior, in October, and the lowest rating since October 2019—when CEOs said disputes and hostility in Washington were ruining an otherwise positive climate for business. Two years later, there is similar sentiment surrounding the impact of politics and government on business, and this month’s rating is below every reading in 2020, when Covid-19 caused severe crises worldwide. And although most businesses have regained their footing, polled CEOs say they’re uncertain that things will improve further from here.

CEOs’ list of concerns has hardly changed in months: Supply chain disruptions, labor constraints and inflation pressures, coupled with expected tax increases, increased government spending and renewed mandates have convinced many CEOs that the 2022 landscape isn’t likely to be business friendly.

“Instead of focusing on the real issues of consumer confidence, rising prices, low morale, incented joblessness and disenfranchised businesses, congress and the President seem more keen on figuring out massive tax bills and propagated myths around the effectiveness of vaccines,” says JD Harris, CEO of Minneapolis, Minnesota-based tech and cyber consultancy Ascent Solutions LLC, echoing several of his peers’ sentiment. “People are getting seriously tired of it, and our politicians are completely out of touch with reality.” His forecast for business by November 2022 is “poor”—or 2/10 on the Index scale—down from a reading of 7 today.

Tim Zimmerman, CEO at Mitchell Metal Products, a family-owned manufacturer of HVAC sheet metal products based in Merrill, Wisconsin, rates current conditions near perfect, at 9 out of 10, but expects them to deteriorate to a 7 by this time next year. “Supply chain difficulties are weighing on business sentiment. Labor shortages are actually difficult. The combination of the two will throttle back the ability of economic growth to remain sustained,” he says.

“The current administration’s policies seem to point to a rather anti-business future,” says American Plastic Toys President John Gessert. “This will likely not curb inflation in the next 12 to 18 months.”

“The bubble must burst at some point,” says Fred Pieplow, president of Michigan consulting firm Manna Management LLC. “The goods backed up at the ports will enter the market at unscheduled times and cause disruption in normal supply and demand for imported goods.”

“There are a numerous external factors (i.e., supply chain, inflation, labor, legislative, tax policy, environmental, etc.) which are adversely impacting all businesses to varying degrees depending upon its industry. Most, if not all of these factors, are beyond a business’ ability to control, therefore creating great uncertainty and complexity,” says Bill Baldwin, CEO of NJ-based management consulting firm Kepner-Tregoe.

Thomas Mercaldo, president, Milford, Connecticut-based specialty staffing firm Aquinas Consulting, cites competition for workers, pricing issues due to inflation, expected rising taxes and energy costs, along with supply chain issues disrupting manufacturing as the reasons for his forecast for a weak business environment in the coming year.

He’s not alone. An increasing number of CEOs forecast business conditions to weaken over the next 12 months, up 5 points since October, to 40 percent (vs. 33 percent who expect them to improve, and 27 percent who say they will remain flat).

James Loree, president and CEO of Stanley Black & Decker, is among those forecasting the status quo. “Strong demand is capped by supply chain deficiencies and will most likely [be] offset by a growing inflation tsunami,” he says, giving current and future business conditions a rating of 6 out of 10—or “good” according to the scale points.

“There will be improvement in the supply chain, lower pressure on commodities and unwavering consumer demand,” says Fabien Kelbert, president of global manufacturer Rivulis Irrigation, who is among those forecasting improvements in 2022.

Steve Schiller, president of structural engineering firm John A. Martin & Assoc., agrees: “I think we will have cycled through the pandemic and will have more certainty in the congress.”

The latest poll from our sister site, StrategicCFO360 also found an increasing proportion of CFOs forecasting worsening conditions, at 45 percent. Finance chiefs’ rating of future conditions dropped by 11.5 percent in October, to 5.9, mainly due to the looming inflationary bubble and increased taxes.

For CIOs, the future looks brighter. In a poll conducted October 25-28, they rated their outlook for business a 7.2 out of 10, fueled by growing technology investments that they believe will create new efficiencies.

The Year Ahead

The proportion of CEOs forecasting increases in their firm’s revenues and profits over the next 12 months declined in November: 63 percent say they expect profits to increase, and 77 percent expect revenues to increase—down 7 and 5 percent, respectively, since October and the smallest percentage on record this year.

Nevertheless, 62 percent say they plan to increase capex in 2022, up 9 percent month over month—and nearing 2020 highs (65 percent in April)—and 66 percent expect to add to their workforce during the same period, up 8 percent since October. This is also approaching the year-high of 68 percent observed in June.

Sector & Size View

CEOs across most industries are showing drops in confidence in November. Advertising CEOs top the list, with forecasts for business 19 percent lower than in October, at a reading of 5.7, followed by Transportation CEOs, whose confidence is down 14 percent MoM.

Among those with improving forecasts, Retail CEOs reported an increase in confidence of 13 percent compared to October—by far the largest of the bunch. Construction and Financial Services CEOs also reported an uptick in confidence this month, but by a much smaller margin, up 2 percent each.

Looking at company size (by annual revenue), small company CEOs are the only ones reporting an increase in confidence for the future in November, up 4 percent since October. However, their overall rating of 5.9 is the second lowest, behind large company ($1B+) CEOs.

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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