Following a decline in CEO Confidence in Q3 of 2018, The Conference Board Measure of CEO Confidence for Q4 again slipped, hitting a Measure of 42, down from 55 in the prior quarter and the lowest number since Q3 2012. Lynn Franco, Senior Director of Economic Indicators at The Conference Board, attributes the decline to growing doubts among CEOs regarding growth in the US, China, and Europe, as well as various overall global and national market issues.
CEO’s assessment of both current and future economic conditions had a considerable drop in optimism as 39 percent of those surveyed said conditions are worse overall versus 8 percent in the prior quarter, and 35 percent saying conditions have worsened in their own industry, another jump from 25 from the prior period. About 54 percent expect economic conditions will decline over the next six months versus 22 percent, with almost half showing similar sentiment to how their own respective sectors will fare over the coming months.
When asked about changes in each firm’s respective selling price, the majority of CEOs expect price increases under 4 percent, while 17 percent foresee a price increase of over 4 percent. Already representatives from major companies in various industries such as food, pharmaceutical, and travel, have announced plans to increase prices.
“Ongoing trade and tariff issues, volatility in the financial markets, cost of debt, and expectations of moderating global growth are heightening concerns. If these conditions persist, we are likely to see weak confidence readings in the New Year,” said Franco.
