While 2009 ended with increasing optimism among company chiefs, the first three months of 2010 show a waning of that confidence level.
The Conference Board Measure of CEO Confidence, which had increased slightly in the fourth quarter of 2009, has dipped two points in the first quarter of 2010, to 62 from 64 at year's end 2009. Yet, it's not a huge drop and a reading of more than 50 points reflects more positive than negative responses, notes the Conference Board.
"CEOs continue to rate current economic and industry conditions favorably, but expectations are that the pace of growth will not pick up in the months ahead. Hiring plans are improved from last year, but less than a third expect employment levels to increase this year," says Lynn Franco, director of The Conference Board Consumer Research Center.
CEOs' assessment of current economic conditions is slightly less favorable, with 71 percent stating conditions have improved compared to six months ago, down from 75 percent last quarter. When it comes to assessing their own industries, business leaders' attitudes improved, with 59 percent claiming conditions are now better, compared with 54 percent last quarter.
Looking ahead six months, CEOs are slightly less optimistic. Approximately 52 percent of business leaders expect economic conditions to improve in the next six months, down from 58 percent last quarter. Expectations for their own industries are also less optimistic, with 42 percent of CEOs anticipating an improvement in the months ahead, down from 45 percent last quarter.
However,m more than 30 percent of CEOs anticipate an increase in employment levels in their industry, up significantly from less than 3 percent a year ago. The proportion of CEOs who anticipate a decrease in hiring plummeted to 22 percent from 86 percent a year ago.