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 America’s CEOs are feeling better about the state of business today than a year ago—unsurprisingly—but their outlook for the year ahead has been on the decline for several months. And now, according to Chief Executive’s latest survey, our leading indicator of CEO sentiment has hit its lowest level since November 2020, as a greater number of CEOs now forecast conditions to worsen over the coming year rather than improve. 

Those are the key findings from Chief Executive’s latest poll of 302 U.S. CEOs, fielded October 5-6. After falling 3 percent in September, CEOs’ rating of current business conditions ticked up slightly (+0.5 percent) in October, at 6.7/10. Although small, that is the first upward movement recorded since the beginning of the summer, when buoyant consumer demand and return-to-office policies fueled sentiment that labor shortages and the worst of the crisis were behind us. 

It’s when looking at the next 12 months that CEOs’ confidence wanes, according to our CEO Confidence Index. Our October reading is now at 6.6 out of 10, down 1.6 percent month-over-month and more than 9 percent off its 2021 high observed in April, when most believed we had turned the page on the Covid virus thanks to a growing vaccination rate across the country—and the subsequent reopening of businesses and hard-hit sectors. 

The last time the indicator was this low was in November 2020, pre-vaccine approvals. Polled CEOs say frustration with Congress, supply chain disruptions, labor constraints, inflation pressures and the fact that the pandemic is still impacting business are part of the long list of reasons for their declining optimism. 

“Supply chain disruptions in conjunction with labor shortages have caused inflationary pressures that are slowing down the economy,” says Karim Chichakly, co-president of software developer and manufacturer isee systems. “Federal spending, both current and upcoming, will add to those pressures. Interest rates will have to rise, further slowing down the economy. The pandemic will still be with us next year with all the uncertainties that brings with it,” he says to explain his downgrading of conditions a year from now.  

Dave Goodin, president and CEO of MDU Resources Group, a large diversified natural resources company based in Bismarck, North Dakota, cites “continued fall out from Covid-related events; vaccine mandates; labor challenges; supply side challenges; growing inflation; looming tax changes” among the list of reasons for his declining forecast for the year ahead.  

David Castellini, CEO of Nevada-based financial services firm Note Funding Center, has similar concerns: “Covid implications; uneconomical Govt. proposals; consumer malaise; global economic softening; continued supply chain issues; FedRes missteps,” although he projects things will get better next year. 

“Lack of workers, supply chain interruption, non-functional federal government that interferes, federal spending and inflation,” says Charles Drobny, CEO and president of Houston-based oilfield technology company GlobaLogix, echoing others. He forecasts conditions will weaken to a 4 out of 10 (“weak” according to our scale) by this time next year, down from a 7/10 today. 

For Steven Muro, president of Fusion Marketing, a California-based agency specializing in the retail channel for perishable and packaged goods, the focus is on politics. “The administration is driving hard change (taxes, mandates, spending, inflation, IRS expansion) without a clear understanding (or a total disregard) of the impact these will have on businesses. And they just keep piling on,” he says. While he still rates current business conditions a 7 out of 10, he forecasts they will deteriorate to a 4/10 by this time next year. 

For Kirk Jefferies, CEO of Texas-based food retailer Lunch Mony, the labor shortage is the main challenge for his business. He cites “lack of employees to run business at 100 percent,” as the main driver, adding that his workforce is expected to decrease slightly over the coming months. 

“Without the ability to hire workers at all levels to do our work, we’re struggling,” echoes Jeff Lighthiser, CEO of Virginia-based engineering firm Draper Aden Associates, also noting that wage inflation is increasing. 

“Inflation and lack of skilled/available workforce will have a negative impact on demand and costs,” says Shaun Burke, CEO at Guaranty Bank, a community bank in Southwest Missouri, to explain his forward-looking rating of 5 out of 10 from an 8/10 today. 

Many CEOs noted that demand is growing significantly, but that there are many roadblocks preventing them from filling orders and pursuing growth. 

“Demand is high right now, but supply chain constraints will limit topline sales while pressuring margins due to limited pricing power and/or mid-season raw material/supplier price increases (inflation),” explains John Archer, executive chairman of Ohio-based sporting and athletic goods manufacturer Kent Watersports. For that reason, he expects conditions to dip slightly over the next year, from an 8/10 to a 7/10. 

“I believe capital spending will remain strong through next year, but it will be difficult for it to stay at this elevated pace it’s at today. Supply chain issues, rising interest rates and most of all inflation will begin to take its toll,” says Jim Nelson, president of lab instrument manufacturer Parr Instrument Company in Moline, Illinois. “I’m also very concerned about tax rates and how it will affect pass-through entities,” he says. 

“Our backlog is high, [but] some of our suppliers are struggling to meet our needs,” says Doug Short, CEO and president of Technifab Products, a fabricated metal products manufacturer in Indiana. He rates his forecast for business one year from now a 6 out of 10, down from an 8/10 today. “I am concerned about upcoming inflation,” he says. 

Denise McIntosh, CEO of Custom Powder Systems, a Missouri-based industrial manufacturer, says “supply chain issues and lack of skilled employees are delaying the orders we do have in house.” She, nevertheless, forecasts conditions to improve once we get past current disruptions. 

She is among the narrowing proportion of CEOs who look at October 2022 with optimism: 33 percent in October compared with 40 percent just one month prior. Instead, the proportion forecast conditions to deteriorate over the next 12 months ticked up one percentage point this month, to 35 percent, while those forecasting the status quo rose to 31 percent from 26 percent in September.  

Yet, there is optimism. 

“We (the U.S.) [are] still doing business while barely 1/2 the country is vaccinated. That number will go up, as it becomes harder to do anything outside your home in the coming months, which will lead to more people spending and going back to work,” says Gary Minor, executive director at TN-based business management consultancy 21st Century Leadership Institute. He forecasts conditions to be a perfect 10/10 by this time next year—a rating given by 4 percent of CEOs participating in this month’s poll. 

“I think that the fundamentals of the economy are strong, and I believe that we are learning to deal with the consequences of the pandemic. I am hopeful that supply chain issues will ease, which should lead to strong economic growth,” says Marc S. Rowland, president of Brentwood, Tennessee-based architectural firm TMPartners, PLLC. 

“I believe both the infrastructure bill will pass along with some version of the 3.5T soft infrastructure bill (probably more like 1.5T). Both should put a lot of money into the economy and result in a significant uptick in employment,” says Michael P Colucci, CEO of IDILUS, a hospital and physician consulting company based in Wheaton, IL, adding “[I} do not believe some tax increases to the top 1 percent and major corporations will have any negative effects on the economy long term.” 

Compared to other members of the C-Suite, though, CEOs remain the least optimistic—although not the most pessimistic. They are tied with CFOs in forecasting worsening conditions, at 35 percent, according to our sister publication StrategicCFO360’s latest polling in late September. 


The Year Ahead 

Despite the challenges, the proportion of CEOs forecasting increases in profits over the next 12 months stayed steady in October, at 68 percent. 

There was, however, a slight uptick in the proportion of CEOs expecting revenues to increase and those planning to raise capital expenditures in the year ahead, up two and nine percent, respectively, to 81 and 57 percent. 

The number of CEOs expecting to add to their headcount dropped 4 percentage points in October, to 61 percent—the smallest proportion since February (59 percent). 

Sector & Size View 

After months of wild fluctuations in CEO confidence by industry, October data shows normalizing movements, with only two double-digit swings month-over-month. Pharma and Consumer Manufacturing CEOs both lost confidence in October, down 11 and 10 percent, respectively. 

For manufacturing CEOs, the main culprit remains supply chain, while several Pharma CEOs say labor shortages are behind their rating for the future. 

Up the upside, Tech CEOs’ confidence rose 8 percent in October, to 7/10 from 6.5 in September. Those with a positive outlook say they are hopeful Covid will soon be behind us, although most acknowledge there remains serious challenges with respect to supply chains and increasing regulations. 

Year-over-year, Healthcare, Pharma, Retail Trade and Consumer Manufacturing CEOs are showing the largest declines in optimism, down 22, 13, 11 and 10 percent, respectively, while Travel CEOs take the top spot in upticks in confidence, up 20 percent since October 2020, as the industry picks up speed amid increasing vaccinations.  

Looking at confidence by company size, the largest variations both on a month-over-month and year-over-year basis are found within the smallest and largest companies (-13 percent MoM and -15 percent YoY on average). Larger company CEOs say labor and regulations are the main reasons driving their forecast, while smaller company CEOs cite a longer list of reasons that includes increasing interest rates, Covid mandates, excessive legislation and supply chain disruptions.  

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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