CEOs’ confidence in future business conditions rose in January as President Trump took office. CEOs rated their confidence in overall business conditions 12 months from now a 7.07 on a scale of 1 to 10, with 10 being the highest. That’s a 20% increase over October’s 5.90 and 21% higher than 5.85 a year ago (February 2016).
While the numbers were positive, the comments were mixed. “Now that we finally have someone in the White House who understands business, the economy will start improving,” one CEO said. “If Trump eliminates the excessive regulations put in place by Obama and repeals Obamacare, the economy has a good chance to skyrocket,” another said.
Conversely, one CEO is “Very concerned about protectionism in the new administration. Likely to have multiple negative effects on my business and others like mine.” Another said, “All of our long-term plans that were moving forward in 2016 are now on HOLD! I am terrified that this clown is going to start a trade war with China or do some other stupid act that will put everything we have worked so hard to accomplish down the toilet.”
The smaller the company, the higher the hopes
Confidence waned slightly among large companies (with revenue of $1 billion+). These firms, which are most likely to be global—are concerned about trade deals and immigration with the new administration. Tech firms, in particular, need access to talent in other countries to innovate and maintain their competitive edge. More than 100 CEOs among firms of this size have been in the media recently heavily protesting President Trump’s ban on travel to the U.S. by immigrants who hail from seven specific (and mostly Muslim) countries.
CEO survey respondents of large companies gave a score of 6.60—the lowest of all four size segments. Upper mid-market firms—those with revenue between $100 million and $1 billion—ranked their confidence at 6.89, while lower mid-market firms—those with revenue between $10 million and $100 million—had the highest rating of the four groups, with a 7.24 average rating (9.6% more confident than CEOs of large companies). Small companies (those with revenues under $10 million), meanwhile, rated their confidence in overall business conditions 12 months from now a 7.10.