Close this search box.
Close this search box.

CEO Optimism Surges in February, But So Do Election Worries

As one CEO put it: “Everything involved with the economy is dependent upon who is elected POTUS in November.”

For more than a year, CEOs have told CE that stalled trade negotiations and fear of a recession have cast a shadow over what they perceived to be an otherwise buoyant economy.

Not anymore.

Chief Executive’s February survey of CEOs finds optimism in future business conditions at the highest level recorded since 2018, when a then-new corporate tax plan and robust fundamentals boosted business morale. In poll of 230 CEOs fielded in early February, the Index hit 7 out of 10, up 4 percent compared to the prior month and 3 percent year over year. So far this year, CEO confidence has increased 6 percent, putting the Index on track for its best performance since the third quarter of 2018.

Note: Chief Executive’s CEO Confidence Index is measured on a scale of 1-10. February poll had 230 responses.

CEOs in our latest poll cite low unemployment, low interest rates, lessened regulatory burdens, strong consumer spending, low energy prices, new trade deals, business-friendly policies, a strong dollar, plenty of liquidity and the end of impeachment proceedings as factors supporting their positive outlook for the year ahead.

“Markets seem to be steady, and I don’t foresee any major international trade disputes,” says the chair of a global transportation company with operations across the United States, who adds that the Fed has an accommodating interest policy in place to support growth.

The Sanders Scenario

But he—like 52 percent of other CEOs—says the only potential worry out there right now which would significantly change their view would be a far-left candidate like Vermont Senator Bernie Sanders winning the 2020 presidential election.

“Everything involved with the economy is dependent upon who is elected POTUS in November,” says the CEO and chair of a large financial services firm, who believes conditions will remain positive through the next 12 months.

The president of a healthcare organization agrees with the forecast. “Pro-business political agenda, low interest rates, generally stable geopolitical environment,” he lists to explain his 8 out of 10 rating (“very good” according to our 1-10 scale) of the 2020 conditions, adding that the “presidential election in November is the wild card that could be disastrous if a socialistic agenda wins.”

“Historically speaking,” says the president of a global industrial manufacturer, “economic performance has not been influenced by who is in the oval office. That being said, I am very concerned by Sanders or Warren being elected.”

Fear of a self-proclaimed “democratic socialist” taking over the presidency is shared by many of the CEOs we surveyed.

“If Trump repeats or Biden or Bloomberg wins, we’re in good shape. Sanders or Warren, it would not look good,” says the chair of a large wholesale/distribution business.

“Business conditions will be excellent if there is a continued occupant in the White House who favors capitalism and not socialism. If the latter is in the White House, business conditions will be ‘poor’ and will deteriorate from there,” says a tech CEO.

“A Sanders win will offset all good done and drive country into recession,” says the CEO of a pharmaceutical company who rates the 2020 environment as near-perfect with a 9 out of 10, although he warns of a decline in profitability if a Democrat is elected, “especially Sanders,” he says.

Beyond the White House

Other factors outside of Washington could also pressure corporate profitability in 2020, CEOs say, with 51 percent citing rising labor costs as their top issue.

“Skilled personnel are the largest challenge to growth,” says the president of a tech company who intends to increase his workforce by up to 10 percent in the months ahead.

“Everyone has all the work they can handle; labor is the main constraint,” agrees the CEO of an upper-mid-market distribution company, who plans to increase his workforce between 10 to 20% in 2020.

And the story is familiar to many others, including the president of a boutique financial services firm who says “there is not enough skilled labor” to fill demand.

“Engineering, technical and entrepreneurial skills available to manufacturers is still scarce,” says one CEO in the industrial manufacturing space.

Downturn Potential

One CEO—who does not view the 2020 business landscape positively, rating it as “weak” with a 4 out of 10—says there is too much uncertainty and volatility to feel confident in near-term conditions.

“With all the volatility globally, politically and economically, I do predict that some unexpected trigger event will happen that will have a domino effect on many/most businesses,” he says. “We have [an] absurd federal deficit that will haunt us at some point. Wages are not keeping up with cost of living. Recession is long overdue and showing signs of weakening economy. Escalating homelessness. Skewed statistics on unemployment rate. Many sectors of population have over 10 percent unemployment and even high ‘under-employment.’”

Despite being part of the minority in our poll—only 22 percent of respondents ranked 2020 business conditions a 5 out of 10 or lower—he’s not alone in this view.

An industrial manufacturing CEO says the “long-sustained market climb suggests higher volatility to come and higher probability of downturn affecting business investment and spending.” For that reason, he rates his outlook a 5 out of 10.

The fear of a potential economic downturn does, indeed, remain somewhat of a concern for some of our respondents, primarily due to the length of the current expansion—not due to any particular indicator.

“The length of the cycle, the exceptional strength of the consumer, all seem vulnerable to exogenous events, as we are currently beginning to experience with the coronavirus,” says the chair of a large hospitality business.

But 60 percent of CEOs say trade negotiations such as the USMCA will contribute positively to the U.S. economy going forward, offsetting the aches and pains of the several rounds of tariffs placed against China in 2019.

“Trade issues are now fixed,” says the chair of a mid-size marketing firm, expecting business to improve over the coming months.

“A return to more normal trade relations globally,” says an industrial manufacturer chair when asked to explain his 9 out of 10 outlook for 2020.

“Rising wages and a receding trade war,” are the reasons behind the 8 out of 10 rating of the CEO of a large financial company.

Overall, CEOs seem to be looking at the start of this new decade through a positive lens. The proportion of those with improving revenue and profit forecasts bounced 12 percent month over month to its highest level since the spring of 2019. Similarly, the number of CEOs planning to add to their workforce in 2020 is also on the rise, along with those expecting to increase capex.

Slicing Down the Data

CEO confidence is often affected by a company’s industry and regional footprint, and once again in February, CEOs with West Coast operations remain less optimistic than the rest of their peers when thinking about 2020 business conditions—with many blaming the high cost of living in the region.

“In California, we see many challenges,” says a professional services CEO, “including an exodus of companies finding the California economy to be pushing companies and individuals out of the state to lower cost states,” he says, adding that policies to house the homeless “will take a financial toll on the state and country.”

“As the State of Oregon continues to burden small businesses with ever increasing tax burdens, business conditions in Oregon will get worse and worse,” says the president of a consumer manufacturing company, who says the cost of healthcare and corporate taxes are the two factors that will put the most pressure on corporate profitability in 2020.

In contrast, Northeastern CEOs are the most confident this month, adding 3 percent to their Index this month and outpacing their Midwestern cohorts—the most optimistic in recent years—in the process.

On the industry front, pharma CEOs reported a 12 percent jump in confidence this month, now ranking as the most confident sector on the basis of, they say, strong order flow, robust new product development and increased investment in R&D. Their healthcare peers are also among the most confident in the future, with a ranking of 7.7. out of 10—up 7 percent since the month prior for similar reasons, including R&D, renewed volume and new efficiencies.

New trade deals, such as the USMCA, are boosting confidence in the construction, engineering and mining sectors, where CEOs say a strong dollar, increased demand and low interest rates are all reasons behind their 11 percent jump in confidence.

The only sectors showing a decline in confidence this month are advertising/marketing (down 10 percent) and financial services (down 1 percent). Uncertainty and instability on the international scene is the main factor behind these numbers, according to surveyed CEOs.

Looking at the data by company size (in terms of annual revenues), we observe that the larger the organization, the greater the confidence. While small company CEOs have not lost optimism for 2020, they say they remain very prudent due to the uncertainty that the upcoming election brings. They say a slowdown will be more difficult for them to absorb than for their large counterparts. For that reason, their confidence is down nearly 6 percent since the same time last year, while all other size groups are either flat or up.

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.


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)


    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.