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CEO confidence weakens, recession ‘near-inevitable’

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October 13, 2022

The Convention Board Measure of CEO Confidence is at its lowest level because the Nice Recession, with a weakened financial outlook and CEOs now getting ready for “near-inevitable recessions” in each the US and Europe.

The measure fell to a studying of 32 to begin the fourth quarter, down from a studying of 34 within the third quarter. Readings beneath 50 factors replicate extra detrimental responses than constructive responses to the measure’s survey.

“CEO confidence sunk additional to begin This fall and is at its lowest stage because the Nice Recession,” mentioned Dana Peterson, chief economist of The Convention Board. “CEOs’ view of present circumstances and expectations deteriorated: Solely 5% reported enterprise circumstances had been higher at the moment than they had been six months in the past, and the identical proportion — simply 5% — anticipated circumstances to enhance over the subsequent six months. Nevertheless, regardless of expectations of slower progress, tight labor market circumstances and wage pressures persist, whereas hiring plans remained sturdy.”

The survey — which targeted on employment, recruiting, wages and capital spending — discovered CEOs’ expectations concerning the short-term financial outlook weakened to five%, down from 7% within the third quarter. CEOs additionally remained pessimistic about circumstances of their industries; 81% mentioned circumstances had been worse, up from 77% within the prior quarter.

The Convention Board’s survey requested CEOs to explain the financial circumstances they’re getting ready to face over the subsequent 12 to 18 months. An amazing majority, 98%, mentioned they had been getting ready for a US recession, and 99% mentioned they had been getting ready for an EU recession.

The Convention Board additionally famous CEOs had been extra cautious about employment.

Forty-four p.c of CEOs anticipate to broaden their workforce over the subsequent 12 months, down from 50% within the third quarter. As well as, 68% of CEOs reported some issues attracting certified staff, down from 73%; of these, 39% report difficulties that minimize throughout the group, slightly than concentrated in just a few key areas — down from 44% in Q3.

Relating to wages, 85% of CEOs anticipate to extend wages by 3% or extra over the subsequent yr, down from 89% within the prior quarter’s survey.

The survey included 136 CEOs and was carried out between Sept. 19 and Oct. 3, 2022.

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