ConferenceBoard’s CEO Confidence Measure Improves

New York, April 10, 2007–The Chief Executives’ Confidence Measure, which had improved to 50 in the final quarter of 2006, rose to 53 in the first quarter of 2007, The Conference Board reports in its latest survey of CEOs. A reading of more than 50 points reflects more positive than negative responses. The survey includes about 100 business leaders in a wide range of industries.

“The improvement in CEO confidence this quarter is due primarily to a decline in the number of pessimists, not an increase in the number of optimists,” says Lynn Franco, Director of The Conference Board Consumer Research Center. “The good news, therefore, is that business leaders do not expect conditions to worsen. But by the same token, they do not expect conditions to improve.”

CEOs’ assessment of current conditions improved moderately. Twenty-four percent of CEOs claim the current economic environment is better, the same as last quarter. However, in assessing their own industries, business leaders were somewhat more positive than last quarter. Approximately 37 percent claimed conditions are better, up from close to 23 percent last quarter.

CEOs’ optimism about the short-term outlook was mixed. Now, nearly 27 percent of business leaders expect economic conditions to improve in the next six months, down from 29 percent last quarter. However, the number of CEOs expecting condition to deteriorate declined to 15 percent from 27 percent in the prior survey. Expectations for their own industries were also more positive, with 35 percent anticipating an improvement, up from 33 percent last quarter.

Nearly 42 percent of CEOs anticipate an increase in employment levels in their industry, down from about 46 percent a year ago. However, the proportion of CEOs who anticipate a decrease rose to 32 percent from about 24 percent a year ago.

Health care costs remain the major obstacle to hiring new workers. Wage and salary costs were second on the list, while regulation and litigation costs and other fringe benefits were of lesser concern to business leaders when hiring new workers.