Ceo Confidence Jumps Upward

Sept. 3, 2009 - PRLog -- NEW YORK – Chief Executive magazine’s CEO Confidence Index, the nation’s only monthly CEO Confidence Index, jumped 18.6% in August.   Though a dramatic improvement in one month, attitudes still lag pre-recession levels.

The CEO Confidence Index has nearly doubled to 77.4 in August from its historical low of 39, reached in February, 2009.  In August, 37.4% of CEOs stated they expect the economy to grow over the next quarter.  This reflects an improvement from July, when only 20.3% expected to see growth over the next quarter.  Still, nearly half (43.6%) of the CEOS surveyed believe that there will be little or no change in the economy over the next quarter.   One respondent remarked, “Business seems to be stabilizing, but is still very fragile.”

All five components of the index rose with the largest percentage gains shown in the Business Condition Index and the Employment Confidence Index.

While the Business Condition Index showed the largest gain, increasing by 29% to 81.1, this component of the index reflects continuing pessimism by CEOs.  Fully 87% of CEOs rated current business conditions as “bad”.  One CEO in the minority commented, “Business conditions are not bad, but…they certainly are not normal, either“.

The Future Confidence Index continues to be the bright spot; it climbed 24% in August to 90.5, reflecting improvements in the business environment.  One respondent declared, “In general, we're seeing improvement.  Momentum will build slowly in Q3 and Q4, but it will show gradual improvement and positive movement.”  

While the Employment Condition Index increased 16%, climbing to 57.0,   93% of CEOs continue to rate employment conditions as “bad”.  Mark E. Renkert, CEO of Fairhaven Crowne, LLC, stated “Unemployment -- this is one of our country's greatest security threats at the moment.  Ten years of growth in employment has been wiped out in the last year…”  

Another respondent commented, “Although hiring is soft, companies are starting to replace people who left for one reason or another (replacements vs. additions).”

The Investment Confidence index shows that CEOs expect capital spending levels to continue to remain steady.  More than half of the CEOs surveyed (54.1%) expect capital spending levels to remain constant, 36.4% expect capital spending levels to decease, and only 11.4% expect capital spending levels to increase.  

One respondent summarized the business environment: “Optimistic on the economy, pessimistic on the speed of recovery.”

Chart and more information available at www.ChiefExecutive.net

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