Overall, CEOs ranked their confidence in future business 12 months out a 6.08 out of 10. Compared to 6.71 in January 2015, that’s a 9.4% drop.
Top complaints include overburdensome taxes and regulations; a lack of leadership in addressing domestic problems and global instability; and structural industry changes.
“With so many negative balls in the air, who can tell what will happen and, even worse, nobody in Washington is doing anything about it,” says one CEO. Another laments “an administration [that] is clueless about creating an environment which incentivizes business to grow.”
CEOs’ outlook on the future diverges significantly by industry, with Pharmaceutical/Medical Device leaders having the most confident outlook on future prospects. These CEOs rated current conditions a 7.2 out of 10, and believe conditions will improve in the next 12 months to a 7.6. They are followed by Construction/Engineering CEOs, who rate current conditions a 7.1. They see a slightly worse environment in 12 months, down to 7.0.
“Even though our company is experiencing growth, our community has lost a significant amount of manufacturing jobs which has had a negative impact on our practice,” says Raymond Zinicola, COO of OMNI Orthopaedics. “I believe the elections in 2016 will potentially make a difference in this area of the economy.”
One Wholesale/Distribution CEO says a lack of talent is constraining growth: “[The] Labor shortage [is] impacting growth in construction. [The government needs] to address immigration to get more good people into the U.S.”
Energy/Utility CEOs, already dour due to battered oil prices, believe even tougher times are ahead. Their low current sentiment (3.8 of 10) looks relatively rosy compared to the even worse outlook (3.5) they see ahead in 12 months. One CEO decries “burgeoning taxes/fees/other changes by the Obama Administration.” The collapse of oil prices is also affecting adjacent industries. “Metal fabrication has been impacted by lower oil prices that affect pipelining, railcar building, etc,” says one.
Retail executive sentiment actually changes from a slight positive now (5.3) to negative territory in 12 months (4.7).