On December 5, 2022, the Business Roundtable released its most recent CEO Economic Outlook Survey for the 4th Quarter of 2022. Notable excerpts from this December 5, 2022 release, titled “Business Roundtable CEO Economic Outlook Index Declines Further in Q4“:
Business Roundtable today released its Q4 2022 CEO Economic Outlook Survey, a composite index of CEO plans for capital spending and employment and expectations for sales over the next six months. The overall Index declined 11 points from last quarter to 73, which is the first time it has dipped below its long-run average of 84 since Q3 2020. The Index remains above the expansion or contraction threshold of 50.
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In their first estimate of 2023 U.S. GDP growth, CEOs projected 1.2% growth for the year. CEOs were also asked to identify the greatest cost pressure facing their company, a question posed every fourth quarter since 2003. Forty-nine percent of Business Roundtable CEOs identified labor costs as the top cost pressure, followed by 15% who identified material costs and 14% who identified supply chain disruption costs. Other top cost pressures included energy and regulatory costs.
On October 13, 2022, The Conference Board released the Q4 2022 Measure Of CEO Confidence. The overall measure of CEO Confidence was at 32, down from the previous reading of 34. [note: a reading of more than 50 points reflects more positive than negative responses]
Notable excerpts from this October 13, 2022 Press Release include:
The recent survey asked CEOs to describe the economic conditions they are preparing to face over the next 12-18 months. An overwhelming majority—98%—said they were preparing for a US recession. Moreover, 99% of CEOs said they were preparing for an EU recession.
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Current Conditions
CEOs’ assessment of general economic conditions deteriorated further to start Q4:
- About 5% of CEOs reported economic conditions were better compared to six months ago, compared to 6% in Q3.
- 81% said conditions were worse, up from 77%.
CEOs remained pessimistic about conditions in their own industries to start Q4:
- 15% of CEOs reported that conditions in their industries were better compared to six months ago, down from 25%.
- 52% said conditions in their own industries were worse, up from 48%.
Future Conditions
CEOs’ expectations about the short-term economic outlook weakened to start Q4:
- Just 5% of CEOs said they expected economic conditions to improve over the next six months, down from 7% in Q3.
- 74% expected conditions to worsen, up from 73%.
CEOs’ expectations regarding short-term prospects in their own industries also weakened to start Q4:
- 19% of CEOs expected conditions in their own industry to improve over the next six months, down from 20%.
- 54% expect conditions to worsen, up from 48%.
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Additional details can be seen in the sources mentioned above.
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I post various economic forecasts because I believe they should be carefully monitored. However, as those familiar with this site are aware, I do not necessarily 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 3883.10 as this post is written
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