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The R Word Is Back As CEO Optimism Stalls In September Poll

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Latest survey data from Chief Executive shows recession fears returning among CEOs amid slowing demand and persistent inflation.

The landing may be soft, but it’s still going to hurt. After a brief pop of optimism earlier this summer, September data from Chief Executive’s most recent polling finds U.S. CEOs once again concerned about what lies ahead for the U.S. economy.  

Persistent inflation, the Fed’s next moves, erratic markets and the upcoming Presidential election are testing everyone’s resilience—so much so that after a brief hiatus, the R word has now made a comeback among a growing number of CEOs we surveyed who predict a short but painful recession for the U.S. “I believe we will be in a recessive mode for the next 12 months if not longer,” said Tim Zimmerman, president and CEO of Mitchell Metal Products., echoing others. 

Consumer demand has been resilient so far, helping companies stay afloat despite the hardships, but there are signs of softening, at least according to the nearly 200 U.S. CEOs we polled in our September survey. Our leading indicator, which measures sentiment for business 12 months from now, stands at 6.1 out of 10 (10 is Excellent and 1 is Poor).  

That’s hardly a doomsday outlook, but it is 4 percent off the August forecast and 8 percent lower than where it was in June, when most believed the Fed was ending its tightening policy. CEOs’ rating of the current environment is similar. In September, they gave the business environment in the U.S. a rating of 6.0—down 3 percent since August. 

“The market is a mess right now, and it could be a while until things get better,” said Brad Stevens, president and CEO of Texas-based professional services firm Level C Solutions. “Too much uncertainty to feel confident about where things are headed.” 

“High interest rates are taking effect, and the economy is slowing. Once the economy slows, it will take a while to pick back up,” said Scott Rasplicka, CEO of industrial manufacturer Delta Metals. He rates the current environment an 8 but expects it to fall to a 5 by this time next year. “I expect the economy to slow in 2024 and accelerate in 2025 if the feds take their foot off the brakes soon enough.” 

Overall, CEOs remain divided over what comes next. A full third expect things to remain more of the same; 32 percent expect them to worsen; and 35 percent said they would improve. When we started the year, 43 percent said they expected things to improve by the end of 2023—that’s a 19 percent drop in optimism in just nine months. 

Zimmerman said his forecast is based on seeing the pace of his company’s North American and Western European incoming orders falling 30 percent since June. “There is a sustained downward trend in place at present.” And interest rate hikes have not yet displayed their full impact, he said. 

Christopher Knuth, CEO of Wisconsin-based manufacturer Profile Finishing Systems, agrees: “I expect the economy to tighten, most specifically in the retail and vacation sectors. I believe the recession we see will be painful but short term.” 

And while feeling optimistic we will see “excellent” business conditions by this time next year, Thomas L Cox, CEO of manufacturing company Acme Machell, said the downtrend in spending is due to how businesses have reacted in recent years. “Our customers overordered when the Covid issues abated and the supply chain issues eased,” he said. “They expected an explosion of delayed or pent-up demand. As one consequence, inventories are being reduced.” 


Despite the forecasts for slowing growth, the proportion of CEOs who expect profits to increase over the next 12 months remained steady in September, at 62 percent vs. 65 percent in August. That is nevertheless 13 percent off the June levels, when the Fed was expected to end its policy. 

The labor market also remains challenging, yet 43 percent said they still plan to increase hiring this year, from 45 percent last month—and 47 percent said they also planned to increase capital expenditures in this environment, up from 45 percent in August. 

The forecasts are heavily dependent on sector. For instance, those in tech and telecom forecast conditions 12 months from now to be much better than the average: 7.7 vs. 6.1. They also rate current conditions higher, 7.1 vs. 6. Few sectors, outside of IT/Telco and Financial Services, expect large improvements in conditions. 

Looking at those with the largest differentials between today’s environment and what they expect 12 months from now, energy and construction CEOs top the list, forecasting a 15 and 12 percent deterioration of business conditions, respectively. 

Real estate CEOs are among those most pessimistic about the coming year, rating current conditions 5.1 and forecasting them to be 4.7 by this time next year—an 8 percent deterioration. 

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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