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Head Scratcher of the Week: CEO Confidence Surges

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The Find: CEO confidence surged in the second quarter, according to new data, but the question remains as to why executives are suddenly feeling so hopeful.
The Source: The Conference Board Measure of CEO Confidence.

The Takeaway: The Conference Board asks 100 business leaders from a wide selection of industries about their outlook for their business, industry and the economy in general each quarter. When the organization crunched the numbers for the second quarter they found something puzzling. The measure of CEO confidence surged from 30 last quarter to 55 this quarter, a finding that indicates more executives have a positive outlook than have a negative one. Lynn Franco, director of The Conference Board Consumer Research Center, comments, "CEOs are considerably more optimistic than last time about the short-term outlook, however, their assessment of current conditions, while also improved, suggests the economy remains weak." Other statistics are also heartening:

32 percent of executives claim conditions have improved compared to six months ago, up from zero percent last quarter.
24 percent claim conditions are better in their industry, up from just one percent in the first quarter.
Nearly 55 percent of business leaders expect economic conditions to improve in the next six months, up from approximately 17 percent last quarter.
46 percent of executives anticipate increases in profits over the next six months, though the majority of those (56 percent) believe cost reductions will drive profits up, while 33 percent cite market/demand growth as the main source of improvement.

The brief release from the organization offered no explanation for the surge. The Question: Why do you think the Conference Board saw such an uptick in CEO confidence? (Image of optimistic sign by Guerrilla Futures | Jason Tester, CC 2.0)

posted by Jessica Stillman
July 14, 2009 @ 4:16 am

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