Business Condition Index, which measures current business temperament among executives, has experienced the highest percentage drop this month, falling approximately 47 percent to 19.5 points from 36.9 points last month. The Business Conditions Index stood at 117.9 percent in November 2007.
Moreover, an unprecedented number of respondents - over 90 percent - said they would rate current business conditions as "bad," compared to 28 percent of CEOs who said the same in November 2007.
"As a testament to the magnitude of the economic crisis facing our nation, the CEO Index is hovering at levels we've never seen before," said Edward M. Kopko, CEO and Publisher of Chief Executive magazine. "And our prediction is that conditions will still get worse before they get better and we are likely to see unemployment rate reach eight percent in 2009."
In November, a record number of CEOs - 75 percent - said they expect employment to decrease over the next quarter, compared to 68 percent of CEOs in October and 41 percent of CEOs that said the same last November.
Moreover, according to the Employment Confidence Index, which is a leading indicator - with a 4-6 month lag time - of actual employment conditions, the nation's unemployment rate is not likely to improve any time soon. The Employment Confidence was the second biggest loser of all the indices this month, falling approximately 31 percent to 35.7 points from 51.5 points in October and approximately 72 percent since November 2007 when the Index was at 129.6 points.
"Our Employment Index has been on a steady decline since August 2007 - right after we witnessed the first signs of a serious credit crunch - and since then our Employment Index declined 78 percent, as we saw the national unemployment rate go from 4.6 percent in August 2007 to 6.5 percent last month," continued Kopko.
"That said, we do see some signs of reduction in the gap between the current and future confidence, which, as late as February of this year, were going in opposite directions. The narrowing of the gap could suggest that we may be nearing a bottom. However, we are likely to see some base-building for a while before things turn positive," concluded Kopko.
Back in February, the point gap between current and future confidence levels was 69.5 points, a sign that current conditions, which were overly optimistic at the time, were not an accurate reflection of future conditions. As a result of continued decline in current conditions, this gap now has narrowed down to just 23.0 points.
In a reflection of dire economic conditions, one respondent said, "The confidence of citizens and business alike has been shaken. It will take many months to inject some stability in the markets."
