Tag: vistage confidence index

A couple of weeks ago Vistage published its National Confidence Index Results.  Below is a report comparing the Chicago area to the nation.  Not surprisingly, Chicago business leaders are a bit more pessimistic.

And yet, a recent report from ITR Economics Housing: 6 Signs of a Better Year Ahead offers a contrarian point of view.  Perhaps the message is, monitor your industry and your business, capitalize on opportunities and accumulate cash so when you want to invest you can.

Here is the Chicago Area Survey Highlights:

ECONOMY

• 12% of CEOs thought the national economy had improved in the past year (vs. 21%nationally)
• 4% of CEOs expect the economy to improve in the year ahead (vs. 12% nationally)

PROSPECTS

• 56% of CEOs expect to increase revenue in the year ahead (vs. 61% nationally)
• 44% of CEOs expect rising profits in the year ahead (vs. 51%nationally)

EXPANSION

• 35% of CEOs expect to increase investments in the year ahead (vs. 37% nationally)
• 50% of CEOs plan to expand their workforce in the next year(vs. 57% nationally)

For the full report click here.

Overall confidence among CEOs of small and midsize businesses declined for the 7th consecutive quarter. The Vistage CEO Confidence Index was 85.0 in the 3rd quarter of 2019, down 3.8% from the prior quarter and 17.5% from last year’s 3rd quarter survey.

While the overall decline points toward a slower pace of growth in the economy during the year ahead, the recent falloff does not indicate that CEOs anticipate a recession. The Great Recession falloff from peak-to-trough was a more substantial 58% drop, compared with today’s drop of 23% from the Q4 2017 peak. The current decline, however, is comparable to the early decline recorded prior to the last recession.

There are a number of domestic and international issues whose favorable resolution could push confidence higher in the months ahead. At present, however, uncertainty about how and when these issues will be resolved will continue to erode confidence. Tariffs have damaged firms, with 41% of CEOs reporting that tariffs have negatively impacted their business,
and 33% reporting that their business was affected by the tariffs that took effect at the start of September.

Importantly, while the falloff in evaluations of the national economy has been substantial, only modest declines have been recorded in expected changes in revenues, profits, and planned hiring. Nonetheless, firms have embraced a precautionary outlook, which will make their forward planning more defensive rather than expansive.

To read the full report, click here.

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.

For the complete report, click here

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

Are You a CEO or President of a Privately Held Business? If you are also a lifetime learner and want to learn more about my Vistage Group, click http://elisaspain.com/impact/

New data from Vistage finds that the economic confidence of CEOs from small and midsize businesses continues to fall. The Vistage National CEO Confidence Index measured 91.6, compared to 95.4 last quarter (Q4 2018) and 105.8 one year ago (Q1 2019). The decline in the index was largely driven by CEOs’ lower assessments of the recent growth in the U.S. economy; expectations for future economic growth remained at the same low level recorded last quarter.

Just 29% of all CEOs reported that economic conditions had recently improved, a 15-point drop from 44% last quarter. In addition, just 14% of CEOs anticipated improvement in the economy in the next 12 months, less than half of the 35% recorded last year.

Chicago CEOs were even more pessimistic. Only 18% reported improved economic conditions, and only 10% anticipate improvement in the next 12 months.

Despite these steep declines, the data “indicates a return to a sluggish pace of economic growth, not a renewed recession,” said Dr. Richard Curtin, a researcher from the University of Michigan who analyzed the survey results. “The all-time low in expectations for improved economic conditions was set in the 4th quarter of 2007 at the start of the Great Recession. The crucial difference today is that pessimism about the economy is now offset by more favorable revenue and profit expectations, as well as more expansive hiring and investment plans, than in 2007.”

The survey was conducted March 4-11 and included input from 1,729 leaders from small and midsize businesses. Click here for the full national report and here for the local Chicago report.

Elisa K Spain

Are You a CEO or President of a Privately Held Business? If you are also a lifetime learner and want to learn more about my Vistage Group, click here

Economic confidence among CEOs continued to decline according to the Q4 2018 survey. The Vistage CEO Confidence Index was 95.4 in Q4, down from 103.0 in Q3 and last year’s fifteen-year peak of 110.3.

Confidence Index Highlights

• 44% of CEOs said the economy had recently improved, a 20 point drop from last quarter.
• 70% of CEOs expect increased revenues in the year ahead. (down from 75%)
• 43% of CEOs expect to increase investment expenditures in the next year. (down from 50%)
• 14% of CEOs expect the economy to post additional gains this year. (down from 25%)
• 61% of CEOs expect increased profits in the year ahead. (unchanged)
• 65% of CEOs plan to expand their workforce in the year ahead. (down from 75%)

Notably, hiring intentions as well as profit expectations showed only small recent variations, although both were below levels recorded earlier this year. The largest disconnect is between the pessimistic outlook for the national economy and the modest declines in how CEOs view their own prospects. For more details, click here.

Elisa K Spain

You can read more of my blogs and leadership quotes here.

Are You a CEO or President of a Privately Held Business? If you are also a lifetime learner, and want to learn more about my Vistage Group, click here.