A critical measure of confidence in the economy declined for the third consecutive quarter in Q1 2022.
“CEO confidence fell further to start 2022 as business leaders struggle to contend with inflation, labor shortages, and yet another viral surge,” said Dana Peterson, Chief Economist of The Conference Board. “In the midst of Omicron’s sudden impact, only one-third of CEOs now report current economic conditions are better than six months ago—down dramatically from over 60 percent in Q4 2021. Expectations for future conditions also softened, though 50 percent of CEOs still expect the economy to improve over the next six months—roughly double the proportion expecting conditions to worsen.”
The measure now stands at 57, down from 65 in Q4 2021. While still in positive territory, the Measure is now down 25 points from the all-time high of 82 recorded in Q2 2021. (A reading above 50 points reflects more positive than negative responses.)
Nearly 75% of CEOs said interest rate hikes were unlikely to curb inflation as the Fed would like and could hurt business expansion.
In addition to current and future economic conditions, the Q1 survey also asked CEOs to share their views on the most pressing COVID impacts and the business and policy response to surging inflation. Notably, nearly 3 out of 4 do not expect projected interest-rate increases from the Federal Reserve to quickly tame rising prices in the months ahead.
“CEOs are preparing for supply constraints and wage inflation to persist well into this year and potentially beyond,” said Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Trustee of The Conference Board. “While interest-rate hikes should help dampen inflation, few are expecting prices to stabilize rapidly. As a result, a vast majority of CEOs still foresee a need to pass along rising costs to consumers over the next 12 months.”
Current Conditions
CEOs’ assessment of general economic conditions declined in Q1 2022:
CEOs were less optimistic about conditions in their own industries in Q1 2022:
Future Conditions
Expectations about the short-term economic outlook weakened in Q1 2022:
CEOs’ expectations regarding short-term prospects in their own industries moderated in Q1:
Inflation and COVID Impacts
CEOs are pessimistic about a quick turnaround in inflation:
For CEOs, the strain of COVID-19 is continuing—but evolving—as the pandemic enters its third year:
Employment, Recruiting, Wages, and Capital Spending
The survey also gauged CEOs’ expectations about four key actions their companies plan on taking over the next 12 months.
Source: CEO Confidence Survey, January 2022 / The Conference Board
The CEO Confidence survey was fielded from January 17 through January 31.
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