For further information: Lynn Franco
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For Immediate Release
Release #4550A
CEO BUSINESS CONFIDENCE IMPROVES FOR SECOND CONSECUTIVE QUARTER
April 19 -- Chief executives' confidence in the nation's economy increased for the second consecutive time, The Conference Board reports today.
The Board's Measure of Business Confidence rose slightly to 53 in the first quarter of 2000, up from the previous quarter's reading of 52. (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.
"But CEOs are less satisfied with the current state of the economy than they were at the end of last year," says Lynn Franco, Director of The Conference Board's Consumer Research Center. "However, with 1999 ending on such a strong note, this softening in sentiment is not alarming."
Approximately 28 percent of CEOs feel ongoing economic conditions are better than they were six months ago, down from 40 percent in the final quarter of 1999. In assessing their own industries, 39 percent of business leaders feel current conditions over the past six months have improved, down from 42 percent last quarter.
Chief executives' outlook for both the economy and their own industries was somewhat mixed. Nearly 20 percent expect economic conditions to improve in the coming months, but almost 31 percent anticipate conditions will weaken. In assessing conditions in their respective industries, approximately 34 percent of business leaders expect an improvement, while only 21 percent hold the opposite view.
HIRING PLANS PICK UP
Approximately 34 percent of business executives anticipate an increase in employment levels in their industry, up from 24 percent last year. The proportion of CEOs that anticipate a decrease declined sharply to 22 percent from a reading of more than 39 percent a year ago.
The biggest obstacles that business leaders anticipate in hiring new workers are wage and salary costs. Regulation and litigation costs and health care costs run a close second. Other fringe benefit costs are of lesser concern to business executives when hiring new workers.
Source: Business Executives' Expectations, First Quarter 2000, The Conference Board
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