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CEO Confidence Drops

The world’s bosses are feeling a bit less confident about the economy these days, if…

  • July 25, 2018

The world’s bosses are feeling a bit less confident about the economy these days, if The Conference Board Measure of CEO Confidence is to be believed.

According to the report, CEO confidence, which had increased in the first quarter of 2018, declined slightly in the second quarter.

The measure now reads 63, down from 65 in the first quarter of 2018 (a reading of more than 50 points reflects more positive than negative responses).

“CEO Confidence declined slightly in Q2, but overall sentiment remains positive,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “CEOs’ optimism regarding the growth prospects for both mature and emerging economies have eased considerably since the beginning of the year. However, most CEOs expect profits will increase over the coming year, with market/demand growth and cost reductions the major driving forces.”

CEOs’ assessment of current economic conditions was about the same as in the first quarter of 2018, with 74 percent saying conditions are better compared to six months ago.

CEO sentiment was also virtually unchanged regarding the assessment of current conditions in their own industries, with about 51 percent saying conditions are better than six months ago.

Looking ahead, however, CEOs’ expectations regarding the economic outlook are much less optimistic than last quarter. Now, just 48 percent expect economic conditions to improve over the next six months, compared to 63 percent in the second quarter.

CEOs’ expectations regarding short-term prospects in their own industries over the next six months were relatively flat, with only 42 percent anticipating an improvement in conditions.

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