CEO confidence in the U.S. economy has dropped into negative territory, according to a survey released Thursday morning by The Conference Board. The index fell to 46 in the most recent period, a decline from 52 just three months ago, marking a shift where business leaders' sentiment has aligned with consumers, whose economic opinions are now lower than during the pandemic.
The nonprofit Conference Board and The Business Council conducted the survey between Sept. 21 and Oct. 5, polling 131 Fortune 500 CEOs. The index measures how chief executives at major public companies view current economic conditions and their expectations for the economy and their industries over the next six months. Any reading below 50 indicates negative sentiment.
Dana Peterson, chief economist at The Conference Board, noted that the surge in energy prices, particularly diesel, contributed to the drop in sentiment. She stated that consecutive inflationary shocks are weighing down the confidence of both CEOs and consumers. Executives also reported significantly higher concerns regarding cybersecurity, artificial intelligence, and geopolitics compared to three months ago. Specifically, 94% of surveyed CEOs cited cybersecurity threats among their top AI-related concerns.
Economic pessimism has intensified sharply among the executive group. Forty-one percent of CEOs expected economic conditions to worsen, up from 19% in the previous quarter. This sour sentiment is shaping up as a key issue in the upcoming midterm elections.
Despite the dimming views on the broader economy, the survey found that CEOs have largely maintained their spending plans. A separate survey also released Thursday morning indicated that 89% of U.S. CEOs expected to increase headcount over the next three years as AI creates more business opportunities. Tim Walsh, CEO of KPMG, which conducted that second survey, explained that integrating more AI into processes and platforms opens up capacity for business expansion, leading to a larger workforce.
The data suggests that while executives are gloomy about economic conditions, this mood has not yet translated into a meaningful pullback in investment or hiring plans.