CEOs showed a continued decrease of confidence in the conditions of U.S. business in the third quarter, according to Chief Executive’s latest CEO Confidence Survey.
The average rank of current business conditions in the U.S., according to the polled business leaders, fell further to 7.46 out of 10, a 2.2 percent decline from September’s ranking. Confidence for future business conditions look even worse at a 7.00 out of 10 ranking.
The CEO Confidence Index is the largest monthly survey of chief executives in America, and each month they survey CEOs from a multitude of organizations of different industries and sizes.
Although 2018 started out with both current and future indices hitting levels that had not been seen since 2004, there has been a downward slope in confidence levels since the end of the first quarter, with exceptions of May and August. These falling confidence levels have been attributed to tariff announcements and failing trade negotiations. The Index still remains in “very good” territory, as scores between 7 and 8 would constitute, but CEOs say they are beginning to fear rising inflation and rising interest rates.
There are CEOs on both sides of the spectrum, with some believing that the current and future U.S. business conditions are at peak levels and some believing that there could be a recession as soon as next year.
“[We’re] just starting to feel the impact of the tariffs now. Customers are looking at higher raw material costs and adjusting their 2019 plans,” said a CEO of a small professional services firm explaining his “weak” rating of 4 out of 10.
“America has gone back to work, we are building things, we are making things, we are excited about the future, lower taxes, fewer regulations, leadership from the White House is positive,” said the CEO of a mid-sized organization, who gave a 10/10 rating for current business conditions and a 9/10 for future conditions. (RELATED: US Stock Market Rebounds After Sparking Worry Over Two Days Of Steep Decline)
Most CEOs continue to expect growth in both revenues (81.7 percent of CEOs) and profits (73.0 percent of CEOs) over the next 12 months.
Availability of talent continues to be one of the biggest challenges in the economy currently, according to the survey, and CEOs reiterated that talent recruitment will continue to be their most important investment in the upcoming year.
CEOs for construction, engineering, and mining firms feel the most confident at an average rating of 8 out of 10, citing tax deregulation and low unemployment as the main reasons for their ratings. Professional services CEOs feel the least confident, with an average rating of 6.33 out of 10. High-tech and telecom industries have had the biggest confidence rating decrease over the past year at 9.3% with rising interest rates and inflation as their primary concerns.