CEO Confidence Declined Slightly in Q3 2024

CEOs downgrade current conditions but cautious optimism for the future remains

NEW YORK, Aug. 8, 2024 /PRNewswire/ -- The Conference Board Measure of CEO Confidence™ in collaboration with The Business Council fell to 52 in Q3 2024, down from 54 in the previous quarter. While this was the lowest reading in 2024, the Measure remained above 50, indicating that CEOs remain moderately optimistic (A reading above 50 reflects more positive than negative responses). A total of 130 CEOs participated in the Q3 survey, which was fielded from July 15 through 29. 

"CEOs remained cautiously optimistic about the future but their views about the current economic situation weakened in Q3," said Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Chair Emeritus of The Conference Board. "Negative views about current economic conditions outweighed positive views of the economy, with more CEOs saying that conditions have worsened compared to six months ago than saying they improved. Their views about current conditions in their own industries also deteriorated. CEOs' views about the economy going forward were little changed, but still positive on net. The balance of opinions on future conditions in own industries was also stable and moderately positive. Regarding top risks to their own industries, CEOs continue to rank cyber risks first, followed by geopolitical instability, and legal and regulatory uncertainty."

"CEO perceptions of labor shortages eased slightly in Q3, as fewer CEOs reported difficulty finding qualified workers," said Dana M. Peterson, Chief Economist of The Conference Board. "The share of CEOs expecting no problem hiring rose to pre-covid levels. Most CEOs planned to continue hiring or keep their workforce unchanged, but there was a slight increase in the share of CEOs expecting to reduce their workforce. Most firms anticipated raising wages by more than 3% over the next twelve months, with most wage increases planned in the 3–3.9% range. However, there was a slight increase in the share of CEOs planning to increase wages by less than 3%. CEOs continued to indicate no revisions to their capital spending plans. The share of CEOs expecting a recession declined further to 30%—down from 35% in Q2 and 84% a year ago. Regarding monetary policy, a slight majority of CEOs (52%) expected one rate cut this year, up from 38% in Q2. The share of CEOs expecting two cuts also rose—to 38% from 26% in Q2. Only 7% expected no rate cuts, down from 31%."

Current Conditions

CEOs' assessment of general economic conditions turned negative in Q3:

• 26% said economic conditions were worse than six months ago, up from 16% in Q2.
• Only 20% of CEOs said economic conditions were better, down from 30% last quarter.

CEOs' assessments of conditions in their own industries also turned negative:

• 31% said conditions in their own industries were worse than six months ago, up from 26% in Q2.
• 26% of CEOs said conditions in their industries were better, down from 30%.

Future Conditions

CEOs' expectations about the short-term economic outlook improved slightly in Q3:

• 32% of CEOs expected economic conditions to improve over the next six months, up from 30% in Q2.
• 25% expected conditions to worsen, down from 26%.

CEOs' expectations for short-term prospects in their own industries were on balance little changed in Q3:

• 42% of CEOs expected conditions in their own industry to improve over the next six months, up from 38%.
• 19% expected conditions to worsen, up from 15% in Q1.

Employment, Recruiting, Wages, and Capital Spending

• Employment: 40% of CEOs expected to expand their workforce over the next 12 months, up from 33% in Q2. Meanwhile, 23% of CEOs expected a reduction in their workforce, up from 21%.
• Hiring Qualified People: 27% of CEOs report some problems attracting qualified workers, but only in key areas, down from 31% last quarter. Only 12% report serious and/or widespread problems attracting qualified workers, unchanged from Q2. 10% reported no problem hiring, up from 6%.
• Wages: 70% of CEOs anticipated raising wages by more than 3% over the next twelve months. Most said they plan wage increases in the 3-3.9% range, but there was a slight increase in the share of CEOs planning to increase wages by less than 3%.
• Capital Spending: Most CEOs are not planning to revise capital spending plans (61%). 23% of CEOs expect their capital budgets to increase over the next year, up from 21% last quarter.

For more, listen to the C-Suite Perspectives podcast with Dana Peterson and The Conference Board CEO Steve Odland.

About The Conference Board
The Conference Board is the member-driven think tank that delivers Trusted Insights for What's Ahead™. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org

About The Business Council
The Business Council is a forum for the CEOs of the world's largest multinational corporations across all industry sectors. Members gather several times each year to share best practices, network and engage in intellectually provocative, enlightening discussions with peers and thought-leaders in business, government, academia, science, technology and other disciplines. Through the medium of discussion, the Council seeks to foster greater understanding of the major opportunities and challenges facing business, and to create consensus for solutions. The Business Council is a non-partisan, not-for-profit entity holding 501 (c) (6) tax-exempt status. The Business Council does not lobby. Visit The Business Council's website at www.thebusinesscouncil.org

SOURCE The Conference Board