What is the CEO Confidence Survey?
The CEO Confidence Survey is a monthly survey of 100 chief executive officers (CEOs) from a variety of industries in the U.S. economy. The survey is conducted, analyzed and reported by the Conference Board, and it seeks to gauge the economic outlook of CEOs, determining their concerns for their businesses, and their view on where the economy is headed. A reading of the survey index with a value above 50 indicates that the CEOs surveyed are more bullish than bearish on their economic outlook.
- The CEO Confidence Survey is a monthly survey of 100 chief executive officers (CEOs) from a variety of industries in the U.S. economy.
- This quarterly report, based on a survey of approximately 100 CEOs in a wide variety of industries, details Chief Executives' attitudes and expectations.
- It is distributed electronically in .pdf format. The survey is administered by The Conference Board, where CEOs are presented with a series of 3 questions.
The Conference Board's CEO Confidence Survey is seen as a leading economic indicator, and it competes with 'Chief Executive' magazine's CEO Confidence Index.
How the CEO Confidence Survey Works
This quarterly report, based on a survey of approximately 100 CEOs in a wide variety of industries, details Chief Executives' attitudes and expectations regarding the overall state of the economy as well as their own industry.
It is distributed electronically in .pdf format. The survey is administered by The Conference Board, where CEOs are presented with a series of 3 questions. There are five reply options for each question. A score for each question is determined by assigning the following values to the replies and calculating the average: Substantially Better—100; Moderately Better—75; Same—50; Moderately Worse—25; Substantially Worse—0. The Measure of CEO Confidence is the average of the scores for Questions 1, 2, and 3. The score for each question, and the Measure of CEO Confidence, thus can range from 0 to 100.
The questions on the survey asks CEOs to reflect on the following: the current economic conditions vs. 6 months ago; expectations for the economy, 6 months ahead; and expectations for their own industry, 6 months ahead. In 2013, the survey was expanded to include CEOs from Fortune 1000 companies in addition to members of The Conference Board.
The CEO Confidence Survey researches CEOs' views on obstacles to hiring new workers, reasons for layoffs, concerns about their industry and the economy, including their short-term and long-term economic outlooks. CEOs are regarded as people who have the power to make large investment decisions that can impact the economy as a whole. This is why the CEO Confidence Survey can provide investors and traders with valuable insight into economic conditions.
The CEO Confidence Survey tends to be a leading indicator of economic activity such as changes in GDP growth, and is used by investors and analysts as part of their overall economic analysis.
Example of CEO Confidence Survey
Let's assume a CEO of ABC Incorporated is taking the survey and is worried about future conditions for her firm and industry. When taking this survey she may rate conditions at her firm with a 25, indicating moderately worse, or with a 0, indicating significantly worse. By putting this information into the survey, once released the overall market can gauge this downbeat expectation and adjust their positions accordingly, being that it is considered a leading indicator.