CEO Confidence Retreated Slightly in Q4 2024

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Oct 24, 2024, 06:00 ET

Optimism faded in Q4 as CEOs were less positive about the outlook for their own industries

NEW YORK, Oct. 24, 2024 /PRNewswire/ -- The Conference Board Measure of CEO Confidence™ in collaboration with The Business Council fell for a second consecutive quarter to 51 in Q4 2024, down from 52 in Q3. The Measure remained above 50, indicating that CEOs remain on balance optimistic. (A reading above 50 reflects more positive than negative responses.) However, optimism has weakened since Q2 2024, when the Measure hit a two-year high of 54. A total of 133 CEOs participated in the Q4 survey, which was fielded from September 30 to October 14.

"CEO optimism continued to fade in Q4, as leaders of large firms expressed lower confidence in the outlook for their own industries," said Dana M. Peterson, The Conference Board Chief Economist. "Views about the economy overall—both now and six months hence—were little changed from Q3. However, CEOs' assessments of current conditions in their own industries declined. (This information is not included in calculating the Confidence measure). Moreover, the balance of expectations regarding conditions in their own industries six months from now deteriorated substantially in Q4 compared to last quarter. Most CEOs indicated no revisions to their capital spending plans over the next 12 months, but there was a notable increase in the share of those expecting to roll back investment plans by more than 10%."

"The majority of CEOs still plan to hire or retain workers in the year ahead, but the proportion anticipating a net reduction in payrolls drifted higher, to 26% in Q4," said Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Chair Emeritus of The Conference Board. "Fewer CEOs reported difficulty finding qualified workers, suggesting that the labor market has continued to come into better balance. Roughly two-thirds of firms anticipated raising wages by more than 3% over the next twelve months, with most wage increases planned in the 3.0–3.9% range. However, there was an increase in the share of CEOs planning to raise wages by less than 3%. Compared to a year ago, there was a noticeable uptick in CEOs concerned about geopolitical instability, along with legal and regulatory uncertainty—which may explain decreasing confidence about prospects in their own industries."

Current Conditions
CEOs' assessment of general economic conditions remained negative in Q4:

30% said economic conditions were worse than six months ago, up from 26% in Q3.
Only 20% of CEOs said economic conditions were better, unchanged from last quarter.

CEOs' assessments of conditions in their own industries also turned negative:

34% said conditions in their own industries were worse than six months ago, up from 31% in Q3.
21% of CEOs said conditions in their industries were better, down from 26%.

Future Conditions
CEOs' expectations about the short-term economic outlook improved slightly in Q4:

33% of CEOs expected economic conditions to improve over the next six months, up from 32% in Q3.
23% expected conditions to worsen, down from 25%.

CEOs' expectations for short-term prospects in their own industries were much less optimistic in Q4:

31% of CEOs expected conditions in their own industry to improve over the next six months, down from 42% in Q3.
22% expected conditions to worsen, up from 19% in Q3.

Employment, Recruiting, Wages, and Capital Spending

Employment: Most CEOs planned to maintain or expand the size of their workforce, but there was a slight increase in the percentage expecting a net reduction to their workforce.
Hiring Qualified People: Labor shortages continued to ease, with fewer CEOs reporting significant problems hiring.
Wages: Most CEOs planned to increase salaries by 3.0–3.9%, but more CEOs are planning increases below 3% in Q4 compared to Q3.
Capital Spending: Most CEOs signaled no desire to change their capital spending plans, but there was an uptick in the share revising them down by more than 10%.

Work Arrangements and Return to Office:
In a special question on work arrangements, a majority of CEOs reported their firms currently have hybrid work schedules (i.e., 1 or more days in the office per week) and expect this to remain the case in 2025. However, the share of CEOs planning to allow employees to work in the office only 1-2 days per week will be lower in 2025, and substantially more CEOs expect their workforce to be 100% in-office next year.

Industry Risks:
CEOs continued to rank cyber, geopolitical instability, and legal and regulatory uncertainty as top concerns for their industry, and worries over financial risks rose.

About The Conference Board
The Conference Board is the member-driven think tank that delivers Trusted Insights for What's Ahead™. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org

About The Business Council
The Business Council is a forum for the CEOs of the world's largest multinational corporations across all industry sectors. Members gather several times each year to share best practices, network and engage in intellectually provocative, enlightening discussions with peers and thought-leaders in business, government, academia, science, technology and other disciplines. Through the medium of discussion, the Council seeks to foster greater understanding of the major opportunities and challenges facing business, and to create consensus for solutions. The Business Council is a non-partisan, not-for-profit entity holding 501 (c) (6) tax-exempt status. The Business Council does not lobby. Visit The Business Council's website at www.thebusinesscouncil.org

SOURCE The Conference Board