The Conference Board and PwC Measure of CEO Confidence

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CEO Confidence Declines

08 Apr. 2015

The Conference Board and PwC Measure of CEO Confidence™, which had improved slightly in the fourth quarter of 2014, declined in the first quarter of 2015. The Measure now reads 57, down from 60 in the fourth quarter (a reading of more than 50 points reflects more positive than negative responses).

“Optimism among CEOs retreated in the first quarter of 2015, and while expectations for growth prospects in the U.S. remained positive, they were less favorable than last quarter. Meanwhile, expectations for Europe, China and Brazil continued to decline,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Regarding the price of oil, more than half of CEOs estimate the price will be between $55 and $74 a barrel six months from now, and two-thirds estimate that will be the price a year from now.”

CEOs’ appraisal of current economic conditions was more positive than last quarter. Approximately 55 percent claim conditions were better compared to six months ago, up from 52 percent in the fourth quarter of 2014. However, business leaders’ assessment of conditions in their own industries declined. Now, just 35 percent say conditions in their own industries have improved, compared with 43 percent last quarter.
CEOs were more pessimistic regarding the short-term outlook. About 38 percent of business leaders anticipate economic conditions will improve over the next six months, down from 49 percent last quarter. Expectations for their own industries, however, were down moderately, with 34 percent of CEOs anticipating an improvement, compared to 36 percent in the fourth quarter of last year.

Global Outlook

CEOs were more positive in their assessment of current economic conditions in Japan, Europe, and China, but overall sentiment remains negative. CEO sentiment in the U.S. and India remains upbeat, but CEOs’ assessment of Brazil has grown more pessimistic since last quarter.

Looking ahead, expectations for India and the U.S. remain favorable, while CEOs remain pessimistic regarding the outlook for Europe, China, Japan, and Brazil.

CEOs Expect Moderate Increases in Oil Prices

In a special question asked this quarter, CEOs were asked to estimate the price of a barrel of oil six and twelve months from now. About 56 percent estimate the price will be $55 to $74 a barrel six months from now, and two-thirds estimate that will be the price a year from now. Only 40 percent expect the price be $40 to $54 in six months’ time, while just 15 percent expect this to be the case a year from now. Less than 5 percent expect oil will reach $75 over the next six months, but about 18 percent believe this is a possibility twelve months from now. None of CEOs surveyed foresee prices declining to $40 or less.

Survey results were fielded from mid-February to mid-March
Source: CEO Confidence Survey 1st Quarter 2015
The Conference Board

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