Conference Board News Release (07/05/12)

The Conference Board Measure of CEO Confidence, which had improved in the first quarter of this year, decreased in the second quarter. The measure now reads 47, down from 63 last quarter (a reading of more than 50 points reflects more positive than negative responses).

Chief executive officers’ assessment of current economic conditions has turned considerably negative. Only 17% claim conditions have improved compared with six months ago, down significantly from 67% last quarter. A more negative attitude was also expressed regarding their appraisal of their own industries. Now, just 22% of business leaders say conditions have improved, compared with 42% in the first quarter of this year.

Regarding profit expectations over the next 12 months, 64% of CEOs expect increases. Among CEOs who expect profits to rise, 46% say market and demand growth will be the primary driving force, while 29% cite cost reductions, and an additional 15% say new technology will serve as the main source of improvement. The remaining 10% cite price increases as the primary driver.