CEOs grow more pessimistic on US economy
Confidence among chief executive officers about the US economy tumbled in the second quarter, as concerns intensified about supply chains and energy. The Conference Board’s Measure of CEO Confidence dropped to 47 from 59 in the first three months of the year, based on results published Thursday. Readings below 50 indicate more negative than positive responses.
Some 141 CEOs participated in the survey, which was conducted from May 4 to 18 and released in collaboration with the Business Council. Nearly half of respondents said that economic conditions were worse, a dramatic swing from the 8 percent who said as much in the first quarter.
Executives see conditions worsening further
“CEOs reported that the economy is materially worse now than it was six months ago, and expected economic conditions to weaken further over the next six months,” said Dana Peterson, chief economist at the Conference Board.
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Forty percent see the business climate worsening in the next six months, up from 13 percent in the previous survey. That shift suggests executives are bracing for continued headwinds, particularly around supply chains and energy costs.
The study period overlapped with renewed trade tensions and volatile commodity markets, though the report does not single out specific triggers. Executives across sectors appear to be reacting to a broader sense of uncertainty rather than a single event.
Capital spending plans hold steady
At the same time, they are not wavering on their capital spending plans. About 37 percent are expecting to increase outlays, a larger share than in the first quarter. That finding may seem at odds with the gloomy outlook, but it could reflect long-term investments already in motion.
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Roger Ferguson, vice chairman of the Business Council and chair emeritus of the Conference Board, said: “Additionally, the ‘low-hire, low-fire’ economy remains in place. The share of CEOs planning to increase the size of their workforce over the next 12 months edged down, while those expecting job cuts rose slightly.”
Labor market signals remain mixed. The data suggests businesses are reluctant to add headcount aggressively but also not rushing to lay off workers. That pattern has persisted for several quarters, according to previous surveys by the organization.
One odd detail: the poll’s response rate and exact methodology are not fully detailed in the release, though the board has conducted this measure for decades. The Conference Board is a non-profit business research group based in New York.
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Supply risks and energy concerns drive pessimism
The drop in confidence was broad-based, with leaders from manufacturing, services, and retail all reporting worse conditions. Supply chain problems and energy price concerns were cited as top concerns in open-ended comments, according to the report.
Peterson noted that the study captures sentiment before the most recent escalation in trade disputes, meaning the next reading could show even deeper pessimism. The next quarter’s results are due in August.
Executives in the energy and transportation sectors were particularly downbeat, though the filing does not break out sector-level data in detail. The overall index now sits well below the historical average of 60.
