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Chief Executive’s November CEO Confidence Index has good news and bad news. Unfortunately, it’s hard to tell which is which.
First, we look to the future: The Index finds improvement in CEOs’ outlook for 2024, with 41 percent of the 182 chiefs polled saying they expect business conditions to improve, compared to only 32 percent last month. So that’s good.
But when asked to forecast the business environment by this time next year, CEOs gave a rating of 5.9 out of 10 (where 10 is Excellent and 1 is Poor)—barely changed since hitting a year-low in October. Not exactly good, but at least it isn’t bad? Or is it bad but at least it isn’t worse.
Then, there’s the current environment: CEOs’ rating of current business conditions fell to its lowest point in over three years, which seems bad. At 5.7 out of 10, the rating is 14 percent off its June peak, with many CEOs citing tightness in the labor market and restrained consumer demand. But it could also be good news: maybe this is as bad as it gets, and things are getting better? That’s one way to look at it. But then we go inside the numbers, and it gets squirrelly all over again:
- Profits. The proportion of CEOs expecting profits to increase in the 12 months ahead dropped to 47 percent, from 56 percent last month.
- Revenues. The proportion of CEOs forecasting revenues to increase over the same period also dropped, down to 56 percent from 68 in October. Almost 30 percent of CEOs polled expect revenues to decline over the next 12 months.
- Hiring. November data shows that 42 percent of CEOs plan to increase hiring in 2024—ticking back up from 37 percent the previous month.
- Capex. Just 34 percent of CEOs plan to increase capital expenditures, down another 3 percent from October, after a double-digit decline the month prior.
What’s driving your feelings? CEOs we polled said they anticipate lower interest rates in the future (good news!). But many CEOs are also beginning to think about the election next year and how that will impact the business environment (not awesome!). They also point to an underlying resilience in the economy that will likely avoid a severe recession (ok, good!). So, our big takeaway from all this? Uncertainty. Happy Monday! Read the full report >
— Isabella Mourgelas, lead analyst, Chief Executive Group, and Dan Bigman, editor, Chief Executive. dbigman@ChiefExecutiveGroup.com
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