Economic Confidence of Main Street CEOs on the Rise

Vistage Survey Indicates Business Leaders Will Need New Strategies and Nimble Skills for Recovery

SAN DIEGO (Apr-22-2009)

Following months of bleak economic outlooks, Main Street CEOs feel the recession has finally bottomed out and the end is in sight . The Q1 2009 Vistage CEO Confidence Index rose to 60.6 this quarter from 48.7 last quarter, largely due to expectations that economic conditions will improve. Every component recorded gains over the prior quarter’s survey. Although this was the largest quarterly gain the index has seen in the last six years, it still left the Confidence Index at its second lowest quarterly reading in the survey’s history.

At the close of 2008, 61 percent of all firms expected the economy to worsen, but by the end of Q1 2009, that figure declined sharply to 21 percent. While Main Street CEOs do see hope on the recession horizon, most anticipated that further cutbacks and a new strategic vision will be required before a successful recovery.

This increase in overall confidence comes on the heels of a new report from Vistage economist Brian Beaulieu who now projects that the recession is going to be over before the end of 2009, months ahead of his earlier prediction.

"The survey also found that these CEOs are finding new ways of growing their businesses, and 41 percent of them say they’ve adapted their leadership style to project confidence in the face of adversity," said Rafael Pastor, Chairman of the Board and CEO of Vistage International. "The post-recession chief executive needs nimble skills and the ability to work on the business, not just in the business." Pastor further elaborates on the findings of the Index and the mindset of Main Street business leaders in the attached video link.

Half of all surveyed firms already reduced their staffs, half still found credit difficult to obtain and half thought the federal stimulus program had a low probability of improving the economy by the end of 2009. Nonetheless, the Q1 2009 Vistage CEO Confidence Index also reflected buoyancy in the CEOs’ individual businesses:

74 percent of CEOs said they plan to maintain or increase their total number of employees in the coming year.
72 percent said they will not be cutting salaries in the next 12 months
67 percent of firms say their revenues will either remain the same or increase during the next 12 months.
62 percent of firms say their fixed investments will remain the same or increase during the next 12 months
When asked how the recession has changed their personal behavior, Vistage member CEOs cited spending less money, spending more time at work and doing more exercise as their top three adjustments.

The Q1 2009 Vistage CEO Confidence Index is a compilation of responses from 2,177 CEOs of small- to mid-sized companies in the United States, surveyed between April 7-16, 2009, with a margin of error of 1.6 percentage points. The quarterly Vistage CEO Confidence Index, established in 2003, is the nation’s largest and only comprehensive report of their opinions and projections.

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