CEO & CFO Surveys 3Q 2011

On September 29 the Business Roundtable’s CEO Economic Outlook Survey was released for the 3rd quarter.  The September Duke/CFO Magazine Global Business Outlook Survey (pdf) was released on September 13.  Both contain a variety of statistics regarding how executives view business and economic conditions.

In the CEO survey, of particular interest is the CEO Economic Outlook Index, which decreased to 77.6 from 109.9 in the 2nd quarter.  Also stated in the report, "In terms of the overall U.S. economy, member CEOs estimate real GDP will grow by 1.8 percent in 2011, a decrease from the 2.8 percent projected in the second quarter of 2011." Also, as seen in the Press Release:

“The findings of this survey show declines in each category of economic measurement,” said Jim McNerney, Chairman of Business Roundtable and Chairman, President and CEO of The Boeing Company.  “While we see strong business fundamentals in America still, the quarterly survey results reflect increased uncertainty among CEOs concerning the economic climate and business environment.”

In the CFO Survey:

Chief financial officers don’t foresee a double-dip recession, but doubts about the strength of the economy have pessimists outnumbering optimists by more than five to one in the United States. Business spending is expected to grow, though more slowly than last quarter, and hiring will continue at a sluggish pace.

also:

Capital spending in the U.S. is expected to see solid growth of 4.5 percent, but that is about half the pace predicted last quarter. One-third of firms say they’ve slowed planned spending this year, citing economic uncertainty and funding constraints.

also:

Domestic U.S. employment is expected to rise about 1 percent in the next year, which would likely leave the unemployment rate stalled around 9 percent.

also:

“This significant drop in optimism is being driven by a number of deep concerns: continued weak consumer demand, intense price pressure, and uncertainty about government policies and global financial instability,” said Kate O’Sullivan, deputy editor at CFO Magazine.

The CFO survey contains the Optimism Index chart, showing U.S. Optimism (with regard to the economy) at 49.4, as seen below:



It should be interesting to see how well the CEOs and CFOs predict business and economic conditions going forward.   I discussed various aspects of this, and the importance of these predictions, in the July 9 2010 post titled “The Business Environment”.

(past posts on CEO and CFO Surveys can be found under the “CFO and CEO Confidence” label)
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I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.
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The Special Note summarizes my overall thoughts about our economic situation


SPX at 1164.97 as this post is written