July 2016: CEO Confidence About Future Business Conditions at Lowest Point in Last 12 Months

According to Chief Executive’s July CEO Confidence Index, CEOs rated their confidence in business conditions 12 months from now a 5.67 on a scale of 1 to 10, with 10 being the highest. This is the lowest score in the last 12 months, and an 8.2% drop from August 2015.

Between the UK’s Brexit vote, the upcoming U.S. presidential election, ongoing terrorism attacks and other global issues, it appears that CEOs are hesitant to think positively about future business conditions right now.

“The current political situation in the United States is highly volatile, and its effect on the rest of the world could be dire,” one CEO said. “The choice for president will significantly impact the expected results,” another said.

Still a third felt that “The fact that American manufacturing survives at all in this dysfunctional universe is a testament to American perseverance,” while another called the tax burden “confusing and burdensome.”

By company size
While there isn’t a significant difference in CEO responses based on company size, there is a clear ratings drop as company size goes down. Large companies ($1 Billion+) had the strongest future outlook, with a rating of 5.91, while small companies (under $10 million) had the weakest future outlook, with 5.34 rating points.

As we continue to follow the fallout from Great Britain’s exit from the European Union and as the U.S. presidential election battle accelerates, CEOs will likely remain cautious.