On January 7, 2020, The Conference Board released the 4th Quarter Measure Of CEO Confidence. The overall measure of CEO Confidence was at 43, up from 34 in the third quarter. [note: a reading of more than 50 points reflects more positive than negative responses]
Notable excerpts from this January 7, 2020 Press Release include:
CEOs are less pessimistic about current economic conditions, with 15 percent saying conditions are better compared to six months ago, up from just 8 percent last quarter. Now, 52 percent say conditions are worse, down from 73 percent in Q3. CEOs are also more positive about current conditions in their own industries. Currently, 25 percent say conditions are better compared to six months ago, up from about 15 percent last quarter. Regarding conditions in their own industry, about 42 percent say conditions are worse, down from 63 percent last quarter.
Looking ahead, CEOs’ expectations regarding the economic outlook is less pessimistic. Now, 12 percent anticipate economic conditions will improve over the next six months, up from just 4 percent in the third quarter. Meanwhile, 44 percent expect economic conditions will worsen, down from 67 percent last quarter. CEOs’ expectations regarding short-term prospects in their own industries over the next six months were also more positive. Now, 23 percent anticipate an improvement in conditions, up from 13 percent last quarter. Those expecting conditions will worsen in the short term declined to 40 percent from 56 percent in Q3.
Last month, the Business Roundtable also released its CEO Economic Outlook Survey for the 4th Quarter of 2019. Notable excerpts from the December 11 release, titled “Business Roundtable CEO Economic Outlook Dips for Seventh Straight Quarter“:
Business Roundtable today released its Q4 2019 CEO Economic Outlook Survey – a composite of CEO plans for capital spending and hiring and expectations for sales over the next six months. The Index decreased 2.5 points from last quarter to a value of 76.7, which remains below the Index’s historical average of 82.7 – an indication of continued moderation in the pace of economic growth.
The 2.5-point decline, while modest, marks the seventh consecutive quarterly decline and indicates that CEO plans have eased from Q3. CEOs remain cautious in the face of uncertainty over trade policy and an associated slowdown in global growth and the U.S. manufacturing sector, which is currently contracting.
In their first estimate of 2020 U.S. GDP growth, CEOs projected 2.1 percent growth for the year ahead.
Additional details can be seen in the sources mentioned above.
I post various economic forecasts because I believe they should be carefully monitored. However, as those familiar with this site are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.
The Special Note summarizes my overall thoughts about our economic situation
SPX at 3265.35 as this post is written