What a difference a quarter makes.
CEOs at some of the nation's largest companies are suddenly much more pessimistic about the overall U.S. economy and the prospects for their own firms and industries than they were just three short months ago.
According to The Conference Board's "Measure of CEO Confidence" survey released Friday, top executives' responses to a series of economic questions garnered an aggregate score of 55 points at the end of the second quarter, down dramatically from the 67 score attained at the end of the first quarter.
Officials at The Conference Board, an independent business membership and research association, said a reading of 50 points reflects more positive than negative responses. A score of 55 is just barely positive and clear indication that the CEOs are concerned about the overall direction of the U.S. economy, uncertainty in foreign markets and the still-stagnant U.S. employment market.
"CEO confidence cooled considerably in the second quarter, a reflection of a sluggish U.S. economy," Lynn Franco, director of The Conference Board Consumer Research Center, said in the report. "Looking ahead, expectations are that this slow pace of economic growth will continue."
At the end of the second quarter, only 33 percent of CEOs said current economic conditions are better than they were six months compared to 85% who felt that way in the first quarter. Likewise, only 40% of top execs said the economic climate for their particular firm or industry improved in the second quarter compared to 61% in the first quarter.
This recent downward revision in expectations mirrors the sentiments of hedge fund managers and high net worth investors who have also voiced concerns that the economy as a whole as well as their individual investments are headed in the wrong direction.
The Conference Board survey, which was conducted between mid-May and mid-June, found that only 43% of CEOs are expecting an improvement in the U.S. economy by year's end compared to 66% who had high hopes in the first quarter.
On the bright side, 70% of corporate chieftains expect their profits to increase in the next year with executives in the durable goods industry most optimistic (74%).
Of the group expecting a fatter bottom line over the next 12 months, 57% said demand for the companies' goods and services will drive profitability. Another 20% said higher profits will be realized through cost reductions while 20% said price increases will be the main source of their improved profits.