CEO Optimism Reaches A High-Point In Second Quarter 2021
A survey of CEOs finds their confidence levels in second quarter 2021 to be at an all-time high. The Measure of CEO Confidence Survey, conducted by The Conference Board in collaboration with The Business Council—a forum for the CEOs of the world’s largest multinational corporations across all industry sectors—improved in the second quarter, following a sharp increase in first quarter 2021. The measure now stands at 82, up from 73—a reading above 50 points reflects more positive than negative responses. This marks the highest level of CEO confidence recorded since the measure began in 1976.
“This quarter’s survey marks a remarkable turnaround from a year ago—when CEO confidence reached a nadir of 34 at the height of COVID-19’s first wave,” says Dana Peterson, chief economist of The Conference Board. “For CEOs, the challenge of navigating a once-in-a-century pandemic is receding, as the focus turns to hiring and investing to compete in an economy poised to see the fastest growth in decades over the months ahead.”
CEOs’ assessment of current economic conditions rose substantially in second quarter, after slightly lessening in the opening months of 2021. In the second quarter, 94 percent said conditions are better compared to six months ago, up from 67 percent in the first quarter. CEOs also expressed greater optimism about conditions in their own industries, with 89 percent reporting better conditions compared to six months ago, up from 68 percent in the first quarter. Historically high expectations in the first quarter climbed even further in the second quarter: 88 percent of CEOs expect economic conditions to improve over the next six months, up from 82 percent.
In the job market, the pace of hiring is expected to accelerate over the next 12 months, with 54 percent of CEOs expecting to expand their workforce, up from 47 percent in the first quarter. While the outlook for wages was virtually unchanged in the second quarter, more CEOs are reporting difficulty finding qualified workers—57 percent in the second quarter, up from 50 percent in the first quarter.
“Optimism is surging in C-suites and boardrooms across industries,” says Roger W. Ferguson, Jr., vice chairman of The Business Council and trustee of The Conference Board. “For CEOs, the challenge is no longer staying afloat, but keeping pace—in particular, with a likely resurgence of the labor shortages experienced before the pandemic.”