American CEOs are finally feeling more upbeat about the US economy, with the mood turning more positive for the first time in two years. The Conference Board said Thursday that its latest Measure of CEO Confidence survey showed a reading of 53 in the first quarter of 2024, up from 46 in the fourth quarter of 2023. A reading above 50 means optimism outweighs pessimism among respondents. Notably, the latest survey marks the first time the gauge has returned a positive reading since the first quarter of 2022. “CEOs are feeling better about the economy, but remain cautious about risks ahead,” said Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Trustee of The Conference Board, said in a statement. More than a third of CEOs expressed positive views on the current economic outlook, marking a 14% increase from the last quarter, and 36% believe conditions will continue to improve over the next six months, up from 19% last quarter. With regards to their specific industries, 39% of CEOs foresee improvements in the next six months, a surge from 26% in the fourth quarter. Contributing to the sunny outlook are factors including falling inflation and optimism that interest rates will come down this year as the Federal Reserve loosens monetary policy. More CEOs also say they expect to expand their workforce in the next 12 months. On the flip side, there is still some caution among business leaders. Major headwinds CEOs pointed to included the 2024 US presidential race, with 50% noting it as the biggest domestic uncertainty, followed by increased regulations and elevated interest rates. Still, only 22% reported worsening conditions, a plunge from 32% in the prior quarter. Additionally, the percentage of leaders holding a bleak outlook for the economy dropped from 47% to just 27%. Zooming out, ongoing conflicts between Israel and Hamas and Ukraine and Russia, deglobalization, and US-China tensions are named as the top three global concerns that could have an impact on business. A resolution to the current military conflicts, AI advancements, and potential rate cuts were listed as the biggest potential positive developments for global business in 2024.
