Top Execs Express Pessimism

SAN FRANCISCO Several months of sluggish economic growth have taken their toll on the outlook of top executives, according to a quarterly poll by The Conference Board.

The “Measure of CEO Confidence,” which had improved to 53 percent in the first quarter of 2007, fell to 45 percent in the second quarter. The survey covers about 100 business leaders in a wide range of industries.

The figures, compiled in June 2007, erase two quarters of improvement, said Lynn Franco, director of the board’s Consumer Research Center. “Looking ahead, CEOs do not expect a significant turnaround in conditions. Only a quarter expect profits to increase versus three-quarters last year, reflecting their pessimistic outlook,” she said.

In assessing their own industries, business leaders are the most pessimistic. Approximately 43 percent claim the economy in their industry is expected to improve in the next six months, down from about 56 percent in the first quarter.

When the executives look ahead for a full year, less than one-fourth anticipates profit increases. Non-durable goods executives have a more upbeat outlook than those in the durable goods industries.

So what’s the good news? Advances in technology, according to the survey, are singled out the most. Among CEOs who foresee a rise in profits, 46 percent believe technology will be the main factor. In comparison, 29 percent cite price hikes as the main source of profit improvements, and only 17 percent say that market growth and demand growth will boost profits.

The Conference Board is a business group and research organization best known for the Consumer Confidence Index and the Leading Economic Indicators.