The Conference Board Measure of CEO Confidence, which had increased in the second quarter of 2009, 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.
“CEOs have grown considerably more optimistic in their short-term outlook,” says Lynn Franco, Director of The Conference Board Consumer Research Center. “Although nearly 60% say they’ve scaled back capital spending plans since January, growing optimism over the past several quarters should translate into increased spending in 2010.”
CEOs’ assessment of current economic conditions was much more optimistic, with 68% stating conditions had improved compared to six months ago, up from 32% last quarter. In assessing their own industries, business leaders were also considerably more positive. Currently, 55% claim conditions are better, up from 24% last quarter.
Looking ahead six months, CEOs are more optimistic than last quarter. About 58% expect economic conditions to improve in the next six months, up from about 55% last quarter. Expectations for their own industries were also more optimistic, with 51% of CEOs anticipating an improvement, up from 45% in the previous quarter.
Capital Spending Plans Scaled Back
Nearly 60% of CEOs report scaling back on capital spending plans since January, while only 7% have increased spending, based on a supplementary question asked each year in the third quarter. This is a considerable change from last year, when 17% had increased capital spending plans and 38% had made cuts. A decline in sales volume was the most cited reason for a decrease in spending plans.