The Conference Board Measure of CEO Confidence, which had decreased in the first quarter, was unchanged in the second quarter
The Conference Board Measure of CEO Confidence, which had decreased in the first quarter, was unchanged in the second quarter. The Measure remains at 62; a reading of more than 50 points reflects more positive than negative responses.
"CEOs' confidence held steady in the second quarter and expectations signal no change in the pace of economic growth in the coming months," says Lynn Franco, director of The Conference Board Consumer Research Center. "The outlook for corporate profits remains optimistic, with almost half saying market/demand growth will be the principal driving force."
CEOs' appraisal of current economic conditions was slightly less favorable, with 67% saying conditions have improved compared to six months ago, down from 71% last quarter. However, in looking at their own industries, business leaders' assessments improved, with 61% claiming conditions are now better, up from 59% last quarter.
CEOs remain positive about the short-term outlook, but appear to be growing slightly more cautious. Forty-eight percent of business leaders expect economic conditions to improve in the next six months, down from 52% last quarter. However, expectations for their own industries are slightly more optimistic, with 43% anticipating an improvement in the months ahead, up from 42% last quarter.
On the issue of profit expectations over the next 12 months, 72% of chief executives foresee increases. Those engaged in the durable goods industry are the most optimistic, with 88% expecting profits to rise. Executives in the nondurable goods industry are second, with 78% anticipating an increase in profits. Only 59% of executives in the service industry expect profits to increase.
Among CEOs who expect profits to rise, 49% say market/demand growth will be the driving force, while 29% cite cost reductions as the main source of improvement. Only 13% cite price increases as a driver of growth. The remaining 9% cite new technology.
Survey results were fielded from mid-May to mid-June.