U.S. CEOs' Confidence Falls To Lowest Level Since 2001

Oct. 12, 2006
Recent economic slowdown and lackluster future growth shakes CEO confidence.

The Conference Board, a business research group, said its chief executives' confidence index had fallen to 44 in the third quarter compared with 50 in the second quarter of the year. "This is the first time the measure has dipped below 50 in nearly five years, when it was at 40 in the final quarter of 2001," according to The Conference Board survey.

A survey reading of over 50 points reflects more upbeat than negative responses, so the decline in the measure below 50 displays a worrying change in chief executives' sentiments.

"The lack of confidence expressed by CEOs is a result of the recent slowdown in economic growth, combined with expectations that this lackluster pace of growth will carry over into the beginning months of 2007," said Lynn Franco, a Conference Board research director. Some economists expect economic growth to slow to around 2% in the third quarter from 2.6% in the second quarter, marking an abrupt slowdown from the 5.6% growth notched up in the first three months of the year.

Much of the slowdown has been attributed to a string of interest rate hikes, the downturn in the housing market and higher energy prices, although oil prices have dropped sharply in recent weeks.

The survey found that only 16% of chief executives expect economic conditions to improve in coming months, down from 21% in the second quarter. And only 16% of CEOs believe the current economic climate has improved, down notably from about 27% in the second quarter.

Copyright Agence France-Presse, 2006

Popular Sponsored Recommendations

Gain a competitive edge with real-world lessons on private 5G networks

Nov. 16, 2023
The use of private networks in manufacturing applications is rapidly growing. In this paper, we present valuable insights and lessons learned from the field with the goal of enhancing...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

How to Build Zero-Cost On-Site Solar and Storage Projects

Nov. 25, 2023
The Inflation Reduction Act offers tax credits, incentives, and financing that enable no-cost projects. In Enel’s eBook, discover the critical role that incentives play in your...

Digitally Transforming Data and Processes With Product Lifecycle Management

Oct. 29, 2023
Manufacturers face increasing challenges in product development as they strive to consistently deliver improved results. Discover how industry leaders are improving time-to-market...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!