CEO Confidence Declines in Q3, but Still Positive - Modern Distribution Management

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CEO Confidence Declines in Q3, but Still Positive

Top executives declining optimism in Europes economy drops Measure 3 points.

The Measure of CEO Confidence declined again in the third quarter of 2014, according to The Conference Board and PwC. The measure now reads 59, down from 62 in the previous quarter. A reading of more than 50 reflects more positive than negative responses.

“While CEOs say economic conditions have improved from the start of the year, their expectations for growth in the short-term have softened,” said Lynn Franco, director of economic indicators at The Conference Board. “Overall, CEOs remain optimistic about growth prospects in the U.S. and India, but sentiment for Europe has declined considerably.”

CEOs’ assessment of current economic conditions, however, was more positive, with 52 percent claiming conditions are better compared to six months ago, up from 46 percent in the second quarter of 2014. Conversely, business leaders’ appraisal of conditions in their own industries declined, with just 41 percent saying conditions in their own industries have improved, compared with 48 percent last quarter.

CEOs’ expectations regarding the short-term outlook were less optimistic. Slightly more than 44 percent of business leaders anticipate economic conditions will improve over the next six months, down from 53 percent last quarter. However, nearly 51 percent expect conditions to remain the same. Expectations for their own industries are also more subdued, with 34 percent anticipating an improvement, down from 46 percent in the second quarter. About 51 percent expect no change in conditions.

Global Outlook

CEOs are more positive in their assessment of current economic conditions in the U.S. and India, but remain negative regarding conditions in Brazil, China, Europe and Japan. More notably, business leaders’ assessment of conditions in Europe and Japan went from positive (a reading of 50 and over) to negative, while India increased into positive territory.

Looking ahead, short-term expectations for Europe, China and Japan declined but remain slightly positive, while expectations for Brazil edged up but remain negative. Overall, CEOs are most positive about the outlook for both the United States and India.

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