CEOs grow more optimistic, third quarter in a row

Latest posts by Rich Sloan (see all)

Ever heard of “The Conference Board”? It’s a global, independent business membership and research association. Their mission is to provide organizations with the practical knowledge they need to improve their performance, among other things.

They do a study on a quarterly basis that measures CEO confidence, which had increased in the second quarter of 2009, and of note, has increased further in the third quarter.

The Measure now stands at 63, up from 55 in the previous quarter (a reading of more than 50 points reflects more positive than negative responses). This is the third consecutive increase.

The survey includes about 100 business leaders in a wide range of industries. According to the study director, “CEOs have grown considerably more optimistic in their short-term outlook.” This optimism should translate into increased spending in 2010.

CEOs’ assessment of current economic conditions was much more optimistic, with 68 percent stating conditions had improved compared to six months ago, up from 32 percent last quarter. In assessing their own industries, business leaders were also considerably more positive. Currently, 55 percent claim conditions are better, up from 24 percent last quarter.

Looking ahead six months, CEOs are more optimistic than last quarter. About 58 percent expect economic conditions to improve in the next six months, up from about 55 percent last quarter. Expectations for their own industries were also more optimistic, with 51 percent of CEOs anticipating an improvement, up from 45 percent in the previous quarter.

But keep in mind a current reality: Capital spending plans have been drastically scaled back. Only 7 percent have increased spending this year. This is in contrast to last year when 17 percent had increased capital spending plans. A decline in sales volume was the most cited reason for a decrease in spending plans.

I hope that this CEO “crowd-sourcing” is of value to you as you make key decisions for your business.

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