Economic confidence varies from street to C-suite
We got new information about what executives think about the economy today. And it seems many CEOs are pretty pessimistic.
Two surveys — Deloitte’s North American CFO Signals survey and the Business Roundtable’s CEO Economic Outlook Survey — come on the heels of some good economic news: consumer confidence improved and there are signs that the housing market is improving.
But according to Greg Dickinson, director of the Deloitte survey, the economy can look different from the “C-suite,” the part of corporate headquarters where executives — CEOs and CFOs — work. Deloitte surveyed 100 CFOs, and many of them are not optimistic about the next 12 months.
“A lot of how you see the world depends on where you sit right now,” he said. “It seems like there’s a bit of a perfect storm of tough circumstances that are making CFOs more pessimistic.”
Through the big picture windows of their corner offices, executives have a really good view of that “perfect storm.”
John Engler, president of the Business Roundtable, said CEOs are not just worried about the sluggish recovery in the U.S., but also about what’s going on around the world: “China slowing down, Europe in chaos. That hurts.”
The Business Roundtable recently surveyed 138 CEOs, and many of them are also pessimistic. They are uncertain about possible tax hikes and spending cuts tied to the so-called “fiscal cliff,” said Engler. They are also worried about regulation and gridlock. Most of the CEOs he surveyed said they don’t expect to spend more money next year or hire new workers.
“Uncertainty to companies usually means [they] pull back a little bit, pause, evaluate the situation,” said John Graham, a finance professor at Duke University who oversees the Duke/CFO Magazine Global Business Outlook Survey.
Graham notes that executives don’t ignore indicators like consumer sentiment, but those are different kinds of metrics. They tell us how people feel about the economy today. Surveys of CEOs and CFOs give us a different perspective. They tell us how some powerful people feel about the future.
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