Optimism Recovers MidYear Losses
Confidence among CEOs in the Q4 2019 survey regained the losses in the prior two quarters to end the year at the same favorable level as at the beginning of 2019. The Vistage CEO Confidence Index was 91.5 in Q4 2019, up 7.7% from the prior quarter and nearly equal to the first quarter’s 91.6. The Index is still below the 95.4 recorded in Q4 2018, and the recent peak of 110.3 at the close of 2017. The steep declines occurred from year-end 2017 to year-end 2018, and the Index reached its recent low in Q3 2019. While this rebound is small, it points toward the expectation that the expansion will continue during 2020, even if at a slower pace.
The anticipation of slower economic growth has continued to temper revenue and profit expectations as well as planned expansions in fixed investments and employment. Those declines were marginal this year, and the latest data regained a good bit of the mid-year losses.
Trends in the Vistage CEO Confidence Index show a close correspondence with year-to-year changes in real GDP published by the U. S. Bureau of Economic Analysis. This correspondence shows that the expectations of firms indicate a small rebound in the pace of economic growth in early 2020. For the full report click here.
— Analysis provided by Dr. Richard Curtin, University of Michigan