Kevin Keane, CEO of the Bainbridge Companies, a real estate firm, plainly explains why he thinks conditions will deteriorate: “Uncertainty in our economy, political stability, world unrest.”

Although Peter Angood, CEO of the American Association for Physician Leadership expects conditions to improve, he agrees with Keane’s assessment of uncertainty, saying, “Workforce issues and the uncertainty of the pandemic’s ongoing influences of societal behaviors,” drive his rating.

Similarly, Kevin Kaestner, president and CEO of Randy’s Worldwide, an upper mid-sized consumer manufacturing company, shares how societal behavior impacts his rating, “My forecast is driven by growing fear and emotions in the market, increased interest rates, and liquidity reducing. No more free money to many consumers which was directly injected into the economy. Also, inflation will slow non-discretionary spending if it persists.” He believes conditions will deteriorate from an 8 now to a 7 in the future.

Many CEOs agree with Kaestner’s sentiment over inflation and interest rates and add that hiring struggles coupled with material price increases are driving their forecast even lower.

“Hiring continues to be a challenge even after multiple rate increases. It also just feels like raw material prices are poised for additional increases,” says John Gessert, CEO at American Plastic Toys. He rates current conditions a 5 and expects them to decline to a 4 in the future.

Rance Poehler, CEO of Toshiba, predicts conditions will remain unchanged at rating of 7 out of 10. He explains, “Hiring talent, inflation, current White House policies and Covid-19 are headwinds. The upside in our retail segment is that our customers are digitizing their business. This provides a lot of potential in 2022/2023.”

Like Poehler, a considerable proportion of CEOs see opportunity despite headwinds and hope that persistent issues in the supply chain and labor market, as well as the effects of inflation, will resolve rather than aggravated further in the coming year, along with Covid-19.

Scott Nykaza, CEO of Kalsec, a Life Sciences company, is one of them. He believes that conditions will improve over the course of the next year to an 8, up from his 7 rating of current conditions. He says, “Businesses are continuing to adapt to a challenging supply chain. We are extending our inventory when possible and retaining a steady workforce. There will be more and more acclimation to resistance from Covid challenge due to recoveries or vaccines.”

 “We believe the Global Supply Chain is as ‘broken’ as it will be, with cost and efficiency improvements projected by mid-year. Inflation should be somewhat mitigated by late 2022 as the government injects less money into the consumer economy,” says Hayward Kelley, executive chairman at Hampton Products International, a manufacturing company. He shares Nyzaka’s forecast for the future, expecting conditions to be at an 8, up from 7 currently, by next year.

Thirty-seven percent of CEOs share the expectation that today’s issues will not endure into the future and predict that business conditions will improve over the coming year—a drop of less than 3 percent. The proportion of CEOs expecting conditions to deteriorate jumped from 25 percent in January, to 38 percent in February, pulling from those who expected no change the month prior.

Inversely, the proportion of CEOs forecasting unchanged conditions dropped to 25 percent from 37 percent in January, signaling that CEOs forecasting improvements are more steadfast in their predictions.