Q2 2019 Vistage Confidence Index: Optimism Tumbles

Since 2003, the Vistage CEO Confidence Index has provided a quarterly comprehensive report of the opinions and projections of more than 1,400 CEOs of small- to mid-sized companies about the economy, their hiring and investment plans, and prospects for their revenues and profitability.

The Vistage CEO Confidence Index has been a proven predictor of GDP, two quarters in advance.

Confidence among CEOs tumbled to the lowest level since late 2016 according to analysis of the Q2 2019 Vistage CEO Confidence Index survey. The CEO Confidence Index was 88.4 in Q2 2019, down from 91.6 in the prior quarter and last year’s 104.1. This represents the lowest CEO confidence level in the past three years since the 87.9 recorded in Q4 2009. However, one of the components measured in the Index – CEO sentiment about future economic conditions – is at the lowest in 10 years. The falloff was driven by much less favorable assessments of the national economy, which tumbled by about 30% from last year’s readings. All other components of the Confidence Index also declined:

  • 13% of CEOs expected improved economic conditions while 35% expected the national economy to worsen in the year ahead.
  • 64% of CEOs expected increased revenues in the year ahead, while 9% expected a decrease, driving the Revenue Index to 155, the lowest in nearly seven years.
  • Just 54% of CEOs expected increased profits in the year ahead, down from last year’s 62%.
  • 56% of CEOs plan to expand their workforce in the year ahead, while 7% indicate they will decrease the size of their workforce, the lowest proportion in nearly three years.
  • Small declines in CEOs planning increased investments are signs of an expected slowdown rather than a downturn in the economy.

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Elisa K Spain http://elisaspain.com/leadershipcoach/

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