Top Executives Less Optimistic About Economy
Chief executives aren’t feeling too confident about the U.S. economy, according to a report issued this morning. The Chief Executives’ Confidence Measure, which fell to 50 during the second quarter, continued to fall to 44 in the third quarter, reports the Washington, D.C.-based Conference Board in its latest survey of CEOs. 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. This is the first time the measure has dipped below 50 in nearly five years, when it was at 40 in the final quarter of 2001.
“The lack of confidence expressed by CEOs is a result of the recent slowdown in economic growth, combined with expectations that this lackluster pace of growth will carry over into the beginning months of 2007,” says Lynn Franco, director of The Conference Board Consumer Research Center.
CEOs’ assessment of current conditions weakened further in the third quarter. Now, only 16% of CEOs claim the current economic environment is better, down from about 27% in the second quarter. In assessing their own industries, business leaders were less upbeat. Approximately 28% say conditions are better versus 40% during the last quarter.
CFOs are also less optimistic about the short-term outlook. Now, only 16% of business leaders expect economic conditions to improve in the coming months, down from 21% last quarter. Expectations for their own industries were also less positive, with 20% anticipating improvement, down from 31% last quarter.