Confidence in the US economy continues to slide, according to the latest Vistage CEO Confidence Index. Chief executives of small- and mid-sized businesses are becoming increasingly concerned about the turmoil in financial markets and the effects it may have on their businesses. In the latest report, for Q3 2007, the Vistage CEO Confidence Index fell to 81.4, the lowest it has been since the survey began in 2003.
A quarterly measure of economic, market and industry trends, the Index dropped nine points, down from 90.5 in the prior quarter and 89.3 a year ago. Comparatively, when the Index was first created, confidence was measured at 100.0 in Q2 2003 and 108.7 in Q3 2003.
"Of the 2,103 business leaders surveyed, the concern is not only about the economy, but also about the availability and cost of credit to their companies," said Richard Curtin, Ph.D., a consultant for the Vistage CEO Confidence Index and director of consumer surveys at the University of Michigan at Ann Arbor. "Because of this, executives plan to put some of their planned investments on hold for the remainder of the year," he said.
Overall, the survey indicates business leaders expect a slowdown, but not a turndown in the economy. Companies still expect strong growth in their revenues, and have no plans to cut payroll. Just like the prior quarter, recruiting and retaining talent is the most important challenge executives face, although uncertainty about the economy may also slow hiring. Despite the sharp decline in confidence, the majority of business leaders (59%) did not think the economy would worsen any more this year.