For CEOs, Cautious Optimism Continues - InformationWeek

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10/5/2010
11:14 AM
Michele Warren
Michele Warren
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For CEOs, Cautious Optimism Continues

The latest CEO Confidence Index from Vistage International yielded mixed results. While many SMB leaders are confident their firms will enjoy some growth in the year ahead, they also foresee obstacles that need to be cleared.

The latest CEO Confidence Index from Vistage International yielded mixed results. While many SMB leaders are confident their firms will enjoy some growth in the year ahead, they also foresee obstacles that need to be cleared.The Q3 2010 Confidence Index is a compilation of responses from 1,845 CEOs of small and midsize businesses in the United States. These execs were surveyed between Sept. 14 and 24 of this year. The Confidence Index was established in 2003.

Specific highlights from the survey:

-The Confidence Index, an overall measure of how CEOs are feeling about the economic climate and their businesses, inched up to 95.1 from 94.4 in Q2. CEOs say they've focused on containing costs, retaining customers, and expanding their line cards in the past six months. Another bit of good news: Execs say they see no evidence of a "double-dip recession."

-An overwhelming majority of CEOs -- 92%, to be exact -- expect employee healthcare costs to increase in the next 12 months. Two-thirds say their businesses will be harmed if the Bush tax cuts aren't extended. And 46% report that unfavorable credit market conditions continue to plague them.

-Almost half of respondents (46%) plan to expand their workforces in the coming year. That's up from 39% a year ago but still lower than any time before the 2008-09 recession. CEOs say they're keeping a rein on payroll additions because of concerns about future sales growth and new healthcare regulations.

-Two-thirds of surveyed CEOs expect their revenue to grow, and most likely because of increased sales, not price increases; 7% anticipate a revenue decline.

-Of the CEOs surveyed, 41% plan to increase their investment spending, up from 31% a year ago.

"No double dip [recession] is good news," said Rafael Pastor, chairman and CEO of Vistage. "But healthcare, taxes, access to credit, and overall economic uncertainty remain obstacles to jump-starting sustainable growth."

Perhaps the most searing indictment of our troubled economy, though, comes from this statistic: 52% answered "no" or "not likely" when asked if they would start their business in the current economic climate.

Click here [PDF] for more survey highlights.

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