CEOs’ confidence in future business (12 months out) is not necessarily down from previous months. At 5.99 on a scale of 1 to 10 with 10 being the highest, it would be more accurate to say that it is flat compared with the first three months of this year. The reason is likely that CEOs are reserving judgment until they know which way the presidential election is going to go. Continued economic problems around the world also have CEOs holding back.
“[I’m] very concerned with [the] lack of talent among all the presidential contenders,” one CEO said. “[It’s] a group of very poor choices!”
“Unfortunately none of the presidential candidates are business friendly and may be a negative surprise,” another said, while a third felt that “Uncertain political and legal situations” are cuaing businesses to move with great caution “with respect to capital expenditures and growth initiatives.”
Nearly half (45%) of respondents expect their capital expenditures to grow in the next 12 months. Fully 35% expect no change at all, while 20% expect their capex to be down.
“We are expecting dynamic economic crosswinds and headwinds,” one CEO said. “ I believe that possible stagflation is hidden within the economic numbers. When you take into account the increased globalization of the FOMC, we are more likely to be impacted by geopolitical issues in the EU and China. Much more so than the prior two recessions.”