CEO survey: View from the top less optimistic

A measure of confidence among business executives dropped during the second quarter on less upbeat assessments for current economic conditions as well as expectations for the next six months.

The Conference Board reported that its Measure of CEO Confidence fell to 47, down 16 points from the first quarter. A reading below 50 reflects more negative than positive responses.

“CEOs began the year quite upbeat. But the lackluster performance of the economy so far, and expectations of more of the same, have clearly impacted attitudes,” said Lynn Franco, director of economic indicators for the Conference Board, a business research and membership group.

“On a positive note, CEOs remain confident profits will continue to increase, driven primarily by market (and) demand growth,” Franco added.

Far fewer chief executive officers responding to the survey upon which the second quarter measure was based said economic conditions have improved compared to six months ago. Just 17 percent of CEOs reported improving conditions, down 50 points from the first quarter.

CEOs also were less upbeat in assessing their own industries. Only 22 percent said conditions had improved, 20 points below the first quarter.

Expectations for improving economic conditions over the next six months were similarly subdued. Just 20 percent of business leaders said they expect improvement, down 39 points from the first quarter.

In forecasting conditions for their own industries, 25 percent of CEOs said they anticipate improvement, a decline of 19 points.

At the same time, however, 64 percent of business executives said they expect profits to increase over the next year. CEOs in the durable and nondurable industries were the most optimistic, with 71 percent calling for rising profits. Meanwhile, 62 percent of CEOs in the service industry said they anticipate increases.

Among those business executives who expect rising profits, 46 percent cited growth in markets and demand as the driving force. Another 29 percent cited cost reductions, 15 percent new technology and 10 percent price increases.


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Posted by on Jul 13 2012. Filed under Business News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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