CEO Confidence Buoyed by Improvements in the Economy

The Conference Board Measure of CEO Confidence™ in collaboration with The Business Council rose sharply in the final month of Q3 to the highest level recorded since Q1 2018. The measure stands at 64, up from 45. (A reading above 50 reflects more positive than negative responses.) While CEOs’ future expectations about the economy (orange line) and their own industries (green line) rose above the critical 50 point in Q2 2020, their assessment of current economic conditions (blue line) had remained poor until just recently. This component of the headline index improved markedly in September, in tandem with the lower COVID-19 transmission rates and steadily improving economic indicators that month.

Looking ahead, hiring plans have cooled, and the potential for layoffs remains, with one-third of CEOs saying they anticipate reducing their workforce over the next 12 months. However, they also reported that their plans for future capital spending have improved significantly. Finally, when asked what the most important long-term impact of the pandemic would be on their business, more than eight out of ten CEOs cited acceleration of digital transformation.