The results of the latest Vistage CEO Confidence Index are sobering, as confidence in the overall economy dropped from a high of 105.2 in Q1 to 92.9 in Q2, wiping out all gains in confidence realized during the past two years. Whereas 63% of Vistage CEOs said the economy had improved in the First Quarter, 63% said it had declined or stayed the same in the Second Quarter.
While confidence may be waning, don’t expect small business CEOs to sit on their hands. Belief in their own businesses still outpaces their confidence in the overall economy, so we’ll likely see CEOs becoming even more innovative in driving market demand, expanding internationally, leveraging technology, and even entering the mergers and acquisition markets.
Main Street CEOs will again lead by example, but they expect Washington to do its part as well. Not necessarily in the form of new stimulus or increased taxes, but in an even more basic way: to live within its means, just as businesses and families across this country are challenged to do each and every day.
Consider this: 57% of Vistage member CEOs stated that Congress should NOT raise the debt ceiling. While that may surprise some of you, I’ve talked with a number of Vistage members about this and learned that, while no one wants the U.S. to default on its financial obligations, the majority of our members believe it is time to send a clear message that the practice of perpetually raising our credit limit has to stop. They believe it’s about time Washington starts to be responsible and far-sighted by reducing the national debt. Renewed confidence depends on it.
As we move toward the August 2nd deadline, it’s important that lawmakers’ avoidance of a U.S. default is accompanied with a deep and real commitment to fiscal sanity.