US CEO confidence dipped in second quarter

Wed Jul 7, 2004

CHICAGO, July 7 (Reuters) - Chief executives were slightly less confident about the U.S. economy in the second quarter although they remained upbeat, according to a Conference Board survey released on Wednesday.
The group said its CEO confidence index declined to 70 in the most recent quarter after surging to 73 in the first period. A reading of more than 50 points reflects more positive than negative responses.

Economists said the survey's results are in line with other recent reports.

"They've scaled back their expectations, but CEOs expect the economy to maintain its current pace of growth," said Northern Trust economist Asha Bangalore. She noted the index is close to the historical high of 76 set back in the early 1980s.

According to the survey, CEOs' assessment of the current economic conditions held steady at 78. More than 90 percent said economic conditions have improved, the same as in the first quarter.

When asked about the economic outlook for the next six months, CEOs' confidence dropped to 68 percent from 72. Expectations for their own industries also fell, to 65 percent from 70.

About 88 percent of the CEOs said they expect profits to rise, up from 65 percent a year ago.

Among manufacturers, those in the durable goods industry were more optimistic than in nondurable. All of the durable goods CEOs expected higher profits versus 85 percent in nondurables.

The Conference Board's quarterly survey covers more than 100 chief executive officers in a wide variety of industries.




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