CEO confidence in the U.S. economy is waning as survey results and comments from top executives suggest a dim outlook.
The Conference Board’s second-quarter measurement of CEO sentiment revealed that 57 percent anticipate the economy to go through a “very short, mild recession.” This represented the fourth consecutive quarter of declining expectations.
According to the business research group’s regular survey, 61 percent of CEOs noted that general economic conditions were worse compared to six months ago, while 37 percent stated that conditions in their own industries were worse.
“CEO confidence weakened further in the second quarter, as executives contended with rising prices and supply chain challenges, which the war in Ukraine and renewed COVID restrictions in China exacerbated,” said Dana M. Peterson, chief economist of the Conference Board, in a statement. “Expectations for future conditions were also bleak, with 60 percent of executives anticipating the economy will worsen over the next six months—a marked rise from the 23 percent who held that view last quarter.”
A recession is defined as two consecutive quarters of negative economic growth, according to the National Bureau of Economic Research. But the Bureau broadened its recession indicators, looking at four other key areas: payroll employment, industrial output, volume of sales in the manufacturing and trade sectors, and inflation-adjusted personal income.
Business leaders have been open about their consternation surrounding the broader economy.
Bob Bilbruck, CEO at Captjur, a technology and development services firm, shared his colleagues’ pessimistic assessment of the economy.
“I think many CEOs like myself know we are in a recession. We also know things are not all roses as the political class would have you believe.”
He also believes that surging gasoline prices, which hit a fresh all-time high of $4.622 per gallon on May 31, will force consumers to stop spending, which is bad news for the broader economy, which is two-thirds consumption.
“I think many CEOs are digging in to ride out the storm and actually see the worsening recession as a good thing,” Bilbruck said. “Money has been too easy too long, it’s had a very negative effect on the real economy. Wall Street has loved it, but all good times come to an end—this time I think it’s going to be a bad one much like 2008.”
By Andrew Moran
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