SOURCE: Chief Executive Magazine

January 03, 2008 07:30 ET

CEO Confidence Makes Modest Gains After a Historic Four-Month Decline

CEOs Are Split Over Whether 2008 Will Bring Good or Bad Tidings

MONTVALE, NJ--(Marketwire - January 3, 2008) - The Chief Executive Magazine CEO Confidence Index, a leading economic indicator of executive sentiment, reversed its historic decline, which had started in August, and rose eight percent to 122.1 points in December. The slight gains made last month mark the end of a weak year in which the CEO Index fell 26 percent and recorded the worst ever six-month decline in its history.

Following the rather dramatic declines in the second half of the year, all of the component indices of the CEO Index rose in December in a sign of the possible "soft landing" for which most CEOs are hoping.

"The shift in the direction of the CEO Index is an encouraging sign for the economy," said Ed Kopko, CEO and publisher of Chief Executive Magazine. "However, it is too soon to interpret this as a sign of sustained reversal on economic trends. All in all, CEOs believe that lower interest rates are helping to constrain the effects of the subprime meltdown, but they fear that they may also be contributing to a deeper and more sustained correction of the markets."

In a sign of encouragement, the Business Conditions Index, which tracks faith in current and near-term business conditions, recorded the biggest gains in December, rising nine percent. Rating the current business conditions in the U.S., more than half of the CEOs (53 percent) said business conditions were "normal," while those rating the conditions as "bad" declined to 23 percent from 28 percent in November. The percentage of CEOs that rated the conditions "good" remained the same at 22 percent.

Even the Employment Confidence Index, which recorded the lowest gains (two percent), showed signs of improvement, as 48 percent of CEOs expect the current employment conditions to hold over the next quarter, compared to 43 percent last month; 18 percent expect an increase, compared to 16 percent last month; and 33 percent expect employment to drop over the same period, compared to 41 percent in November. Similarly, most CEOs (54 percent), rate the current employment conditions in the U.S. as "normal," while nearly 29 percent rate them as "good."

In general, the CEOs' sentiments about the economy painted a rather mixed picture, as 43 percent predicted a gradual growth of the economy, while nearly 32 percent predicted no growth or decline. Approximately 22 percent of CEOs predicted a gradual decline.

Steven Schiltz, CEO and President of Minnesota Exteriors, Inc., said, "The first and second quarters of 2008 will be the slowest yet for housing." While others, such as CEO Michael Corley of Progressive Employer Services, looked for the silver lining: "All this change and uncertainty will create opportunities!"

Among other indices, the Future Confidence Index made the second biggest gain, increasing more than eight percent to 98.9 points. Third was the Investment Confidence Index, which increased eight percent to 108.5 points, and finally, the Current Confidence Index increased by four percent to 156.6 points.

The CEO Confidence Index survey was conducted Dec. 6 through 17 among 292 top executives. For additional information regarding the confidence of public- and private-company CEOs, details about CEO attitudes on employment, investment and business conditions, visit:


Chief Executive is a controlled circulation magazine that has been published since 1977. It reaches 42,000 chief executive officers and their peers, reaches a total readership of 228,000. Chief Executive Group facilitates "Chief Executive of the Year," a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of his or her peers. Robert Ulrich, A. G. Lafley, George David, Fred Smith, Bill Gates, John Chambers, Michael Dell and Sandy Weill are just some of the leaders who have been honored during the award's 22-year history. Chief Executive also organizes roundtable meetings and conferences to foster opportunities for top corporate officers to discuss key subjects and share their experiences within a community of peers. Visit for more information.

CEO Index, December 2007
Respondents: 292

                             December 07     Monthly Change
CEO Index                          122.1                7.5
Current Confidence Index           156.5                6.7
Future Confidence Index             98.9                8.1
Business Condition Index           128.8               10.9
Invest Confidence Index            108.5                8.3
Employment Confidence Index        132.4                2.8

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