Chief executives' confidence in the nation's economy retreated for the second consecutive quarter of 2002, The Conference Board reported.
The Conference Board's Measure of Business Confidence now stands at 54 (a reading of more than 50 points reflects more positive than negative responses) after declining to 61 in the second quarter. The Measure of Business Confidence is based on quarterly surveys of more than 100 chief executives representing a wide variety of U.S. industries.
“Despite executives' concern about the present state of the economy, CEOs' expectations for the near future remain cautiously optimistic,” said Lynn Franco, director of The Conference Board's Consumer Research Center.
The percent of business executives who say conditions are better now than they were six months ago deteriorated dramatically, from approximately 62 percent last quarter to a current reading of 29 percent. In assessing their own industries, only 26 percent felt conditions over the past six months had improved, down from 57 percent last quarter. The percent of those holding the opposite view climbed from 14 percent to nearly 37 percent.
Chief executives' short-term outlook for the economy is less optimistic than last quarter. Approximately 62 percent expect an improvement in economic conditions in the coming months, down from 71 percent last quarter. In assessing conditions in their respective industries, 53 percent expect an improvement, down from approximately 61 percent. About 11 percent expect conditions to worsen, up from 7 percent last quarter.
Approximately 11 percent of CEOs report an increase in their companies' capital spending plans since January, while 38 percent have scaled plans back. In The Conference Board's 2001 survey, 8 percent of business leaders had increased their capital spending plans while 47 percent had made cuts.