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CEO BUSINESS CONFIDENCE IMPROVES -- FEW EXPECTING SIZABLE PRICE INCREASES
January 19 -- Chief executives' confidence in the nation's economy increased in the final quarter of 1999, after having declined sharply in the third quarter, The Conference Board reports today.
The Board's Measure of Business Confidence rose slightly to 52 in the fourth quarter, up from the previous quarter's reading of 51. (A reading of more than 50 points reflects more positive than negative responses). The Measure of Business Confidence is based on quarterly surveys of more than 150 chief executives and other business leaders representing a wide variety of U.S. industries.
Slightly more than 40 percent of CEOs feel that economic conditions have improved, up from 23 percent in the previous survey. The majority of chief executives expect changes in their firms' selling prices this year -- with only 6 percent anticipating price increases in excess of 10 percent. More than 14 percent expect price decreases.
Those who feel that business conditions have deteriorated in the last six months declined from 12 to 11 percent. More than 42 percent feel conditions are better, up from 34 percent last quarter.
Executives' outlook for the short term is mixed. Currently, 20 percent of CEOs expect economic conditions to improve over the next six months, about the same proportion as last quarter. Those expecting conditions to be less favorable declined sharply, from 35 percent to a current reading of less than 25 percent. Business leaders' expectations for conditions in their own industries were more positive than in the last survey: almost 42 percent feel conditions will improve, up from 31 percent, while the percentage expecting conditions to worsen fell to less than 24 percent from 32 percent in the previous survey.
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Source: Business Executives' Expectations, Fourth quarter 1999
The Conference Board
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