Since the inception of the survey in October 2002, there has never been such a sharp decline in all five indices simultaneously. Moreover, in a tremendous contrast to last month where the Business Condition Index, which measures current business temperament among executives, experienced the highest gains amongst the five indices, it dropped 65.6 percent to 36.9 points.
"We have seen precipitous decline in CEO Confidence since last summer, but we have never seen confidence drop so sharply and dramatically during one polling cycle," said Edward M. Kopko, CEO and publisher of Chief Executive magazine.
Reflecting the economy and the job market, 67.6 percent of CEOs believe that employment will decrease over the next quarter. Over the past year, the number of unemployed persons has increased by 2.2 million and the unemployment rate has reached 6.1 percent. As such, Chief Executive magazine predicts unemployment to reach 6.5 percent over the coming months and may increase to as high as 7-8 percent based on recent confidence readings.
The unemployment data supports the significant drop in both the Future and Employment Confidence Indices, which decreased to their lowest levels ever (51.6 percent and 49.4 percent, respectively), further indicating that we have a tough job market ahead of us.
The Investment Confidence Index, which tracks capital spending at corporations as well as CEO market confidence, was the most resilient in October as it fell only 16.4 percent with 48 percent of respondents saying they considered current investment conditions to be "bad." Many CEOs surveyed sense that the economy's troubles were a mix of public and private concerns: "The next President needs to reduce federal spending and the deficit - but not by further weakening the social safety net which will be even more necessary in the next years."
