C.e.o. confidence declines
October 08, 2007
by Keith Nunes
NEW YORK — 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 range of industries.
"Despite the rather bleak assessment of current conditions, c.e.o.s are not as pessimistic in their short-term outlook," said 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."
Chief executive officers’ assessment of current economic conditions was less favorable, with 14% claiming economic conditions had improved, down from 23% last quarter. In assessing their own industries, business leaders were also less optimistic. Approximately 17% claim conditions are better, down from approximately 23% in the first quarter.
Executives, however, are moderately more optimistic about the short-term outlook than last quarter. Now, approximately 20% of business leaders expect economic conditions to improve in the next six months, up from 17% last quarter. Expectations for their own industries are also more upbeat, with 27% anticipating an improvement, up from 17% last quarter.
Some 24% of c.e.o.s report increases in their companies’ capital spending plans since January of this year, while 13% 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% of respondents had increased their capital spending plans and 9% 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.