Yesterday’s release of the latest edition of the Vistage CEO Confidence Index continues to reverberate throughout the executive community.
The consensus expressed by that Index — which just reported its largest quarterly gain in two years, a remarkable 18 percent increase — points to signs of confidence in the U.S. economy, and a positive attitude that the situation is quickly improving.
Hiring Planned. “Net increases in employment were planned by 55 percent of all firms,” the report states. That’s the “highest percent that planned job additions since 2007.”
When asked what lawmakers should do to help create jobs, 33 percent of CEOs replied, “make the current tax cuts permanent.” Providing employers with hiring incentives was the response for 17 percent more, and 14 percent said to “increase spending on infrastructure.”
Get the Hands-on Experience! Try out the interactive CEO Confidence Index Tool
Economy Improving. “More than twice as many CEOs thought that the economy had improved in the latest survey compared with one quarter ago,” the report explains.
“Improved economic conditions were cited by 41% in the 4th quarter, up from just 18% in the 3rd quarter. Just 12% thought the economy had recently worsened. When asked about prospects for the year ahead, additional economic gains were expected by 40%, twice the 20% recorded in the 3rd quarter.”
Better Revenue Prospects. Seventy-three percent of all firms expect revenue growth, up from only 62 percent in the prior quarter. That rate is “much closer to the year-ago level of 77 percent.”
“Revenue expectations were twice as favorable as at the recession low, when just 36 percent expected higher revenues in the closing quarter of 2008.”
Brighter Profit Outlook. Fifty-five percent of companies anticipated increasing profits. “While the worst impact of the recession on profits is clearly over (just 9% anticipated declining profits, down from a peak of 36% three years ago), the expectation of higher profits is still well below the peak of 74% in the 4th quarter of 2003.”
More Investing. Investments in equipment and facilities were planned by 42 percent of CEOs, “the highest level since 48 percent was recorded at the start of 2011.”
That confidence is being fueled by two reports released today: A surge of some 325,000 private-sector jobs, and a decline in the government’s weekly jobless claims, down 15,000 to 372,000.
“This continues an acceleration in employment that began back in late summer, so it propagates an ongoing trend,” commented Joel Prakken, chairman of Macroeconomic Advisors. “It also seems to be consistent with other elements that suggest improvements in the labor market.”
The Vistage CEO Confidence Index is a compilation of responses from 1,641 CEOs throughout the United States taken over ten days in mid-December. Vew the full report at PR Newswire.
Get the Hands-on Experience! Check out Vistage Connect’s interactive CEO Confidence Index Tool and browse this information at your own pace, to your own specific tastes.
[EDITOR'S NOTE: Keep checking back in the coming days for more reports and insight on the exclusive data contained in The Vistage CEO Confidence Index. Click to read part I in this series: Vistage CEO Confidence Index Takes Biggest Leap Since 2009.]