For further information: Lynn Franco, (212) 339-0344
The Conference Board
For Release Tuesday, April 13, 1999 at 10:00 a.m. ET Release #4479A
CEO CONFIDENCE CONTINUES TO IMPROVE But Hiring Plans Not As Ambitious As In 1998
Chief executives' confidence in the nation's economy increased for the second consecutive quarter, The Conference Board reports today.
The Conference Board's Measure of Business Confidence in the first quarter of 1999 rose to 46, an increase of 3 points from the prior quarter's reading of 43 (a reading of more than 50 points reflects more positive than negative responses).
"Business executives' appraisal of ongoing economic conditions improved from the previous quarter," says Lynn Franco, associate director of The Conference Board's Consumer Research Center. "CEO confidence is being strengthened by the continued positive growth of the U.S. economy."
OUTLOOK FOR HIRING LESS ROBUST THAN IN 1998
Approximately 24% of CEOs anticipate an increase in employment levels in their industry, down from almost 30% last year. The proportion of CEOs that anticipate a decrease climbed to more than 39% from a reading of almost 26% a year ago.
The biggest obstacles top executives see in hiring new workers are regulation and litigation concerns, which were also the most cited issues last year. Wage and salary costs, along with health care costs, were of less concern; fringe benefits remain of minimal concern to business executives when hiring new workers.
Approximately 25% of CEOs surveyed feel economic conditions have gotten better over the past six months, up from 12%. Those who feel conditions are worse now versus six months ago declined considerably, from close to 50% to approximately 19%.
Executives' optimism regarding conditions in their own industries also increased markedly. Approximately 24% of CEOs rate conditions as better than six months ago, up from about 13% in the final quarter of 1998. Slightly more than 32% feel conditions are worse, down from 44%.
Business leaders' outlook for the coming six months has also improved from last quarter. Now, just under 37% of CEOs foresee economic conditions deteriorating over the next several months, down from 50% previously. Approximately 17% of survey participants expect the economy to improve during the next six months, virtually unchanged from the prior survey. Business executives anticipating conditions in their own industries to pick up increased from 22% to a current reading of 32%. The proportion expecting conditions to worsen declined from almost 40% to slightly more than 25%.
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Source: Business Executives' Expectations, First Quarter 1999, The Conference Board
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