CEO & Small Biz Confidence Don’t Align

July 19, 2010

The Conference Board recently released its Measure of CEO Confidence.  Taken between mid-May and mid-June, the reading of 62 was flat with the first quarter.  The trend has still been positive over the last year (any score over 50 indicates more positive responses than negative).  The good news is that nearly 3/4 of respondents expect profit increases over the next year, driven primarily by revenue growth – not cost cutting. As the chart above (from Argus Research) indicates, small business confidence is still very low.  Facing tight credit and rising costs the National Federation of Independent Businesses (NFIB), June survey took a significant dip.  The NFIB’s “Good Time to Expand” measure remains at near multi-year lows.  Since the primary engine of job growth is small business, especially small businesses beginning to scale to become big businesses, the survey indicates that more tough times lie ahead. My experience mirrors the chart.  I’m seeing quite a bifurcation in CEO outlooks.  Some executive teams are really focusing on growth initiatives, basically saying the world is what it is and now is the time to “get on with it.”  Other executives are still taking shelter “waiting for normalcy to return.”  My concern is that much of the revenue growth I’m seeing is caused by an increase in capacity utilization (thus increasing the commodity value of various products or services).  This increase is caused primarily by a decrease in capacity, not by better business management.  It’s my feeling that businesses still need to get their demand generation engines running – and those that do will take business from those that are waiting.  So, even though the economy isn’t growing at a “hot” pace, doesn’t mean that you can’t. How do you feel?  Do you expect growth?  Are you hiring?  What are you plans?

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Comments

2 Responses to “CEO & Small Biz Confidence Don’t Align”

  1. Katherine Mock says:
    August 5, 2010 at 11:14 am

    The 2Q Vistage CEO Confidence Index survey findings echo the Conference Board results showing CEOs are confident that sales and hiring will increase during the next 12 months. Despite talk of a double dip recession and suggestions from other surveys that there is a low level of faith in the economy, the Vistage survey indicates an increased assurance in small business growth:

    http://multivu.prnewswire.com/mnr/vistage/44997/.

    Reply
  2. Doug Davidoff says:
    August 5, 2010 at 11:38 am

    Katherine, thanks for that. It’s good to hear.

    Reply

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