CEO optimism slipped again, according to a fourth-quarter survey by the Conference Board.
Conducted in collaboration with The Business Council, the Measure of CEO Confidence dipped to 51 from 52 in the prior third quarter. The Measure hit a two-year high of 54 in the second quarter of 2024. Because the Measure remains above 50, CEO confidence is still considered optimistic, even though it has weakened in the last two quarters. Current data points are better than levels for the same year-ago quarter when the Measure fell to 46.
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“CEO optimism continued to fade in Q4, as leaders of large firms expressed lower confidence in the outlook for their own industries,” The Conference Board’s chief economist Dana M. Peterson said. “Views about the economy overall—both now and six months hence—were little changed from Q3. However, CEOs’ assessments of current conditions in their own industries declined.”
She added that the “balance of expectations regarding conditions in their own industries six months from now deteriorated substantially in Q4 compared to last quarter.” However, while most CEOs indicated no revisions to their capital spending plans over the next 12 months, there was a notable increase in the number of those expecting to roll back investment plans by more than 10 percent, Peterson said.
The latest Measure survey was conducted from Sept. 30 to Oct. 4, with a total of 133 CEOs participating in the Q4 study.
For current conditions, 30 percent of participants said economic conditions were worse than six months ago, up from 26 percent in the third quarter. And 34 percent said conditions in their own industries were worse than six months ago, up from 31 percent in the prior quarter. As for their short-term economic outlook over the next six months, 33 percent of respondents expect conditions to improve, up from 32 percent in the third quarter. But when it came to their own industries, only 31 percent expect improvement over the next six months, down from 42 percent in the prior quarter.
Looking ahead to the jobs front, the picture was mixed.
“The majority of CEOs still plan to hire or retain workers in the year ahead, but the proportion anticipating a net reduction in payrolls drifted higher, to 26 percent in Q4,” Roger W. Ferguson, Jr., vice chairman of The Business Council and chair emeritus of the Conference Board, said. “Fewer CEOs reported difficulty finding qualified workers, suggesting that the labor market has continued to come into better balance.”