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After a strong start to the year, CEOs’ confidence in the future of business conditions dropped this month on uncertainty in the supply chain and labor market. This comes at a time when demand has not yet receded and the need for workers has only increased. CEOs are also concerned that increasing interest rates, inflation driving up material costs and decreasing consumer spending power, and instability in domestic and international politics will worsen business conditions. Despite their qualms, CEOs still expect Covid-19 to have a reduced impact on the overall economy by the time 2023 rolls around.

Those are the key findings from Chief Executive’s latest poll of 457 U.S. CEOs, fielded February 1 through 3, which asks America’s business chiefs to rate the environment today and 12 months out based on their assessment of business conditions—and forecast the impact on their company’s growth.

CEOs’ rating of future business conditions fell by less than 5 percent this month, down to 6.6 out of 10 from last month’s rating of 7. Their rating of current business conditions remained stable, however, hovering at 6.7 out of 10. Over the last six months, CEOs’ rating of current conditions has remained steadier compared to their forecast for the future, signaling resiliency in their ability to do business and uncertainty over what’s to come.

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.

The Year Ahead

The proportion of CEOs predicting increases in profits dropped 3 percent this month to 69 percent. CEOs note fears that increases in material and labor costs will drive down their profit. For similar reasons, only 81 percent of CEOs forecast increases in revenues, down 8 percent since February on labor and supply constraints.

The proportion of CEOs forecasting increases in capital expenditures increased slightly this month, up 1 percent to 62 percent from 61 percent in January.


When it comes to labor, 72 percent of CEOs now forecast increases in hiring, up 5 percent since last month. This is the highest proportion on record of CEOs planning to add to their headcount over the next 12 months.


Sector & Size View

In February, CEOs in wholesale lost the most confidence, with their rating down 11 percent. Supply chain issues are the main driver of their discontent, with predictions that they will last into 2023. Tech CEOs have the lowest rating of the month, at 6.4. They predict high interest rates and inflation will have a negative impact on consumer spending.

Retail trade CEOs’ rating was up 5 percent this month on the hope of “exiting the depths of Covid-19”, per one restaurant group CEO.

CEOs across most revenue groups pulled back their rating of future business conditions this month. CEOs in both the smallest and largest companies, in terms of annual revenues, reduced their rating by 4 percent this month to 6.6 and 6.4, respectively. CEOs in upper middle sized companies, those with $100 to $999.9 million in revenues, increased their rating by 1 percent, to 6.7.

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. For additional information about the Index and prior months data, visit


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