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Chief Executive’s October CEO Confidence Index finds CEOs outlook for 2024 at lowest level in a year, with 87 percent of the 240 chiefs polled saying they expect business conditions to either remain flat (29 percent) or turn negative (58 percent).
When asked to forecast the business environment by this time next year, CEOs—polled a few days before Friday’s bombshell jobs report virtually insured more Fed action this year—gave a rating of 5.8 out of 10 (where 10 is Excellent and 1 is Poor). That’s 5 percent lower than what they had forecasted in August and 8 percent off where we started the year. That is 12 percent lower than what it was in June, when the Index peaked.
This month, CEOs also downgraded their assessment of the current environment, to a 5.9/10, shaving 3 percent off their August rating—and 12 percent off their June optimism.
CEOs polled said they are starting to doubt the Fed’s ability to manage a soft landing. The growing probability of a recession, many said, will lead to further increases in unemployment, sticky inflation and a prolonged high-rate environment—all in the midst of a presidential election.
- This month, only 13 percent of the CEOs polled said they expected a recovery in 2024. Others say political chaos, slowing demand, wage pressure and continued high inflation/rates are painting a gloomy picture for the year ahead.
- The proportion of CEOs expecting profits to increase in the 12 months ahead dropped to 56 percent, from 62 percent last month. Overall, more than one quarter said they anticipate less in profits in 2024 when compared with prior year.
- Unsurprisingly, these forecasts are dampening plans to hire, as well as plans for capital expenditures. September data shows 37 and 36 percent planning to increase hiring and capex, respectively, in 2024, vs. 43 and 47 percent in August.
- Overall, two-thirds of the CEOs polled expect conditions to remain difficult in the year ahead—37 percent of which said they project that things will in fact get worse before they get better. That number is up five percentage points since September—and the highest we’ve seen since March, amid the bank crisis.
The data shows significant variations in CEO confidence and forecasts by sector. At opposite ends of the spectrum are pharma CEOs, who expect large improvements in the business climate by this time next year, and retail CEOs, who anticipate conditions to deteriorate considerably in 2024. Read the full report >
— Melanie Nolen, research editor, Chief Executive Group. mnolen@ChiefExecutiveGroup.com
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