CEO Confidence Improves Globally, But Little Pain-Relief Is Expected for Europe

The Conference Board Measure of CEO Confidence™ for Europe by the European Round Table for Industry (ERT) returned to positive territory (58) in H1 2024 — its highest level since H1 2022 right after Russia started its war against Ukraine. Six months ago, the measure stood at a pessimistic 42 on the back of a bleak European growth outlook. Now, however, at 58, the measure signals cautious optimism among executives in the first half of this year. Importantly, CEOs were markedly more optimistic about the business outlook outside Europe than within. The current survey was fielded from April 3 to April 25, 2024. A reading above 50 reflects more positive than negative responses.

Trusted Insights for What’s Ahead™

• The Conference Board Measure of CEO Confidence™ for Europe by ERT improved, from a gloomy 42 six months ago, to a cautiously optimistic 58 in the first half of 2024. All three subcomponents of the confidence measure—namely, views around current economic conditions, six-months expectations for the economy, and six-months expectations for own industry— returned to positive territory, each reaching an almost three-year high. It stands to reason that falling inflation, improved real incomes to support private consumption and a—primarily services-led—pick up in business activity have had a positive impact on confidence. However, one very prominent driver is probably greater optimism around business conditions in markets outside Europe.  
• The gap between CEOs’ assessments of business prospects inside and outside of Europe has widened to its highest level in the survey’s seven-year history. CEOs’ views on their companies’ sales, employment, and investments outside of Europe reached a robust score of 63. However, views on the domestic situation within Europe were relatively flat, slipping slightly from 51 six months ago to 50 in H1 2024, driven down by lower expectations on investment and employment within Europe. The gap between CEOs’ assessments for their companies’ business prospects inside and outside of Europe reflects expectations of slower economic growth in Europe compared to the other major economies globally. 
• In parallel with Europe’s overall confidence measure, CEO confidence also improved in the US and China, albeit less pronounced. In the US, the quarterly-published measure improved, from 46 in Q4 2023 to 54 in Q2 2024, while in China, overall confidence among China-based CEOs of US and European multinational companies (MNCs) increased from 54 in H2 2023 to 56. This is the first time where CEOs’ sentiment is aligned so consistently across the three main regions since H1 2022, when Russia invaded Ukraine.