CEO Confidence Down in 3Q - Modern Distribution Management

CEO Confidence Down in 3Q

Currently, 56 percent of CEOs say conditions are better compared to six months ago.

The Conference Board Measure of CEO Confidence, which reached prerecession highs in the first quarter, declined for a second consecutive time in the third quarter of 2017. The Measure now reads 59, down from 61 in the second quarter (a reading of more than 50 points reflects more positive than negative responses).

“CEO confidence declined again in the third quarter and has cooled since hitting pre-recession highs at the start of this year,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “CEOs still rate current conditions in the US favorably, but their short-term expectations for growth have eased. CEOs also remain optimistic about the growth prospects for both mature and emerging economies, but expectations for Brazil are moderately negative. Regarding spending plans, about 29 percent of CEOs say they have boosted their capital spending plans since January and only 14 percent claim they have scaled plans back.”

CEOs’ assessment of current economic conditions was mixed. Currently, 56 percent say conditions are better compared to six months ago, down from 60 percent in the second quarter. Business leaders, however, are more positive in their appraisal of current conditions in their own industries. Now, 53 percent say conditions in their own industries have improved, up from 47 percent last quarter.

Looking ahead, CEOs’ optimism regarding the short-term outlook for the economy is slightly more pessimistic. Currently, 39 percent expect economic conditions to improve over the next six months, compared to 41 percent last quarter. However, 14 percent expect economic conditions to worsen, compared to 3 percent last quarter. About 36 percent of CEOs anticipate an improvement in their own industries over the next six months, down from 48 percent in the second quarter of this year.

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