CEO Confidence Declines


YORK — The
Conference Board Measure of CEO Confidence, which was unchanged in the
second quarter of 2010, declined in the third quarter. The Measure now
50, down from 62 last quarter (a reading of more than 50 points
reflects more
positive than negative responses). 

Says Lynn
Franco, Director of The Conference Board Consumer Research Center:
confidence has cooled considerably in the second half of 2010, as has
the U.S.
economy. And, expectations are that this slow pace of economic growth
continue into early 2011. Regarding capital spending plans, the news
was a bit
more favorable with three out of every ten chief executives saying they
increased capital spending plans since the start of this year, a
improvement from last year when only 7 percent reported

appraisal of current economic conditions was much less favorable in the
quarter. Less than one-third say conditions have improved compared to
months ago, down from about two-thirds last quarter. In assessing their
industries, business leaders’ appraisal was also considerably
less positive.
Now, only 38 percent say conditions are better, compared with 61
percent last

CEOs are
much more pessimistic about the short-term outlook. Only 22 percent of
leaders expect economic conditions to improve in the next six months,
down from
48 percent last quarter. Expectations for their own industries are also
downbeat, with about 28 percent of CEOs anticipating an improvement in
months ahead, down from 43 percent last quarter. 

Spending Plans Improve in 2010

out of
every ten business executives report scaling back on their
companies’ capital
spending plans since January of this year, while three out of ten have
increased spending, based on a supplementary question asked each year
in the
third quarter. This is a considerable change from last year, when just
percent of chief executives had increased capital spending plans and 58
had made cuts. Among the reasons given for increasing capital
investment plans,
the most common was an increase in sales volume. A decline in sales
volume was one
of the top reasons for a decrease in spending plans. 


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