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The Conference Board Measure of CEO Confidence, which rebounded in the fourth quarter of 2017, made further gains in the first quarter of 2018. The Measure now reads 65, up from 63 in the fourth quarter of 2017 (a reading of more than 50 points reflects more positive than negative responses).
“CEO confidence improved further in the first quarter of 2018, following a rebound in late 2017,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “CEOs remain positive about short-term growth prospects in the U.S., and to a lesser degree, about prospects in other mature and emerging markets. Hiring plans have eased compared to last year, with more than half of CEOs anticipating an increase in employment levels in their industry. However, close to 40% say finding qualified workers remains a major obstacle to hiring.”
CEOs’ assessment of current economic conditions was slightly more positive, with 75% saying conditions are better compared to six months ago, up from 71% in the fourth quarter of last year. CEOs were also moderately more optimistic in their appraisal of current conditions in their own industries. Now, 51% say conditions in their own industries have improved, up from 49% last quarter.
Looking ahead, CEOs’ expectations regarding the short-term outlook was significantly better. Now, 63% expect economic conditions to improve over the next six months, compared to just 47% last quarter. CEOs, however, were only slightly more upbeat about short-term prospects in their own industries over the next six months, with 43% anticipating conditions will improve, versus 41% last quarter.
CEOs view current conditions in the United States, India, and Brazil more favorably than at the end of 2017. CEOs’ assessment of current conditions, while still favorable, declined for China, and to a lesser degree for Japan and Europe.
Looking ahead, CEOs are the most optimistic about short-term prospects for the United States and Europe, while sentiment regarding India’s short-term prospects were unchanged. Expectations for China and Japan declined significantly, but overall remain slightly positive.
Hiring Expected to Increase in 2018, But Finding Qualified Workers Remains a Challenge
Hiring is expected to increase in 2018, but at a more muted pace than last year. About 57% of CEOs surveyed anticipate an increase in employment levels in their industry over the course of this year, while about 11% anticipates a decrease. When this question was asked in 2017, about two-thirds of CEOs surveyed anticipated an increase in employment levels, and about 8% anticipated a decrease.
On a separate question, CEOs cited finding qualified workers as the largest obstacle to hiring, followed by health care costs. Regulation and litigation as a major obstacle to hiring ranks third, followed by wage and salary costs. Other fringe benefits are of much lesser concern when hiring new workers.
About The Conference Board
The Conference Board is a global, independent business membershipand research association working in the public interest. Our mission is unique: To provide the world’s leading organizationswith the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.