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CEO Confidence Declines Further
added: 2007-10-08

The Conference Board Measure of CEO Confidence, which had declined to 45 in the second quarter of 2007, edged down to 44 in the third quarter. A reading of more than 50 points reflects more positive than negative responses. The survey includes about 100 business leaders in a wide range of industries.



"Despite the rather bleak assessment of current conditions, CEOs are not as pessimistic in their short-term outlook," says Lynn Franco, Director of The Conference Board Consumer Research Center. "But although the outlook is somewhat brighter than last quarter, the pace of growth is likely to remain moderate in the months ahead."

CEOs' assessment of current economic conditions was less favorable, with 14 percent claiming economic conditions had improved, down from 23 percent last quarter. In assessing their own industries, business leaders were also less optimistic. Approximately 17 percent claim conditions are better, down from approximately 23 percent in the first quarter.

CEOs, however, are moderately more optimistic about the short-term outlook than last quarter. Now, approximately 20 percent of business leaders expect economic conditions to improve in the next six months, up from 17 percent last quarter. Expectations for their own industries are also more upbeat, with 27 percent anticipating an improvement, up from 17 percent last quarter.

Capital Spending Plans Decline

Some 24 percent of business executives report increases in their companies' capital spending plans since January of this year, while 13 percent have scaled plans back, based on a supplementary question asked each year in the third quarter. This is a moderate change from the 2006 survey, when 28 percent of respondents had increased their capital spending plans and 9 percent had made cuts. Among the reasons given for increasing capital investment plans, the most common was an increase in sales volume. A decline in sales volume was the most cited reason for a decrease in spending plans.


Source: The Conference Board

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