After months of decline, CEO are once again feeling optimistic about an economic recovery.
Confidence climbed 14% in a survey of 157 CEOs. Those surveyed by Chief Executive rated how they feel about their business a 5.8 out of 10—where 10 is “excellent.” CEOs report seeing early indications that by this time next year, the country will be in recovery.
“I am feeling more optimistic this month than in prior months that we may avoid a recession—or if we have it or are in it, it will be brief,” says the CEO of a small PE-backed technology firm. “The economy was ‘too hot,’ which is why we couldn’t hire people, couldn’t get goods from point A to point B, and it was causing craziness. By cooling it down, we will actually get back to a semi-normal labor market, which will bring wages back in line and a semi-normal supply chain. These will be welcome changes.”
CEOs are reporting signs of ease in some of the biggest business challenges, but still have concerns about the war in Ukraine, rising interest rates, high labor, and material and energy costs.
“Inflation will begin to taper off, supply chain will have improved, energy prices will be under control as countries dependent on Russian oil will have begun to find alternative sources and adapt,” says Manuel Flores, president and CEO at SBA lender SomerCor. “There are major government-supported capital investments through recently passed infrastructure bill and soon to be passed semiconductor support bill that may catalyze additional private investment.”
Chief Executive found that the number of CEOs predicting a recession is also declining. In July, 44% of CEOs expected the U.S. to enter a recession by year’s end. In August, 29% say they expect the U.S. to be or remain in a recession.
Optimism is prevalent among CEOs with over half forecasting increasing profits over the next 12 months and more than 60% expecting revenues to rise marking the first increase since January.
Separately, CEOs have responded positively to the bill passed by the U.S. Senate aimed at supporting alternative energy and health care.