Survey: Corporate Confidence Reaches New High

Corporate leaders are more confident about the U.S. economy than at any time in the past 17 years, according to a survey released on Thursday (Feb. 18). The Conference Board Measure of CEO Confidence, done in conjunction with The Business Council, went up in the first quarter of this year, adding to an uptick seen in the September survey. The measure now stands at 73, up from 64, which is the highest level of CEO confidence since the first quarter of 2004.

“With the vaccine rollout underway in major economies, CEOs entered 2021 historically upbeat,” said Dana Peterson, chief economist of The Conference Board. “They foresee the economy improving further over the next six months. However, setbacks from the pandemic remain a risk to future growth.”

Some 82 percent of CEOs overall said they anticipated a boost to the economy over the next six months, up from 63 percent in the previous survey. Compared to the previous survey, just 7 percent thought conditions would get worse, compared to a high of 15 percent. Further, some 78 percent of CEOs expect short-term prospects in their own industries to get better.

“CEOs across industries are planning for life after COVID-19,” said Roger W. Ferguson Jr., vice chairman of The Business Council and Trustee of The Conference Board. “If downside risks are avoided, then this optimism will likely translate into higher wages, employment and capital spending over the next year.” 

More than a third of chief executives surveyed said they expect that wages will rise by more than 3 percent across 2021, up from 22 percent from the previous survey. Almost 50 percent indicated that they would increase jobs, while 12 percent expected to reduce jobs. Furthermore, some 45 percent anticipate expanding their capital spending budgets over the next year. 

CEO confidence is thought to be an indicator of a company’s openness to cut deals. Increased optimism could facilitate mergers and acquisitions.

In January, fiscal watchdogs indicated that a recovery in New York City is still many years away. The new Fiscal Outlook from the New York City Independent Budget Office said the city was hit extra hard. The head of the Federal Reserve Bank of Boston said he expects the economy will start to rebound as vaccinations are distributed.