The Conference Board Measure of CEO Confidence increased sharply in the fourth quarter to 65, after declining slightly in the third quarter to 50. A reading of more than 50 points reflects more positive than negative responses.
“CEO Confidence surged in the final quarter of 2016, reaching its highest level in nearly six years,” said Lynn Franco, director of economic indicators at The Conference Board. “CEOs were considerably more optimistic about short-term growth prospects in the U.S. than in the third quarter, and to a lesser degree about prospects in developed and emerging markets. Regarding prices in 2017, chief executives expect to hike prices by less than 1.5 percent on average.”
CEOs’ assessment of current economic conditions was considerably more optimistic, with close to 60 percent saying conditions were better compared to six months ago, up from just 17 percent last quarter.
Business leaders’ appraisal of current conditions in their own industries also improved significantly, with 46 percent stating conditions in their own industries have improved versus only 21 percent in the third quarter.
CEOs’ short-term outlook for the U.S. economy also improved markedly, with approximately 67 percent expecting better economic conditions over the next six months, up from 25 percent last quarter. The outlook for their own industries was also more favorable, with 58 percent of CEOs anticipating an improvement over the next six months, compared to about 23 percent in the third quarter.
