CEO optimism improves in Q3, but still well below average: Poll
Yahoo Finance’s Jessica Smith joins Zack Guzman to discuss findings from the Business Roundtable’s quarterly business sentiment survey.
Video Transcript
ZACK GUZMAN: Optimism on the economy, at least in the C-suite, seems to be improving here at the latest clip, and the latest survey breaking a nine-quarter decline in optimism here at the latest clip. And for more on that, I want to bring on Yahoo Finance's Jessica Smith with the latest here. And Jessica, it looks like things might be improving.
JESSICA SMITH: Yeah, the business roundtable does this survey every quarter to get a pulse on how CEOs are feeling about their business outlook, about the economic outlook. And this time, they surveyed about 150 CEOs, and they did find that optimism is rising, but it is still well below historical averages and well below pre-pandemic levels.
The index in the third quarter came in at 64. That is up almost 30 points from the second quarter's, but it is still significantly below the historical average of 81.7. And to give you some context on this, a reading of 50 or below typically indicates an economic contraction.
Every quarter, the group also asks CEOs about their plans for hiring, for sales, and for capital investment over the next six months. And in the third quarter, plans for each category did improve. But the CEOs noted that their plans are very fragile.
There was also a special question this quarter asking the CEOs when they think business conditions will go back to pre-pandemic levels for their specific company. 24% said there was never a decline, that things have already improved, or that they will fully recover by the end of the year. 40% expect a recovery next year. And then 36% say it will be 2022 or later before things fully recover.
Now, the business roundtable says that the White House and Congress need to come together, restart stimulus talks, and pass another round of relief. The Business Roundtable CEO Joshua Bolten said in a statement, "Further major support from the federal government is necessary to prevent economic recovery from being derailed. Failure to act, along with the lack of comprehensive and coordinated efforts to stop the spread of COVID-19, would impose long-term damage on the US economy." But Zack, there is still no sign of progress on stimulus talks here in DC.
ZACK GUZMAN: Yeah, after nine quarters of decreased optimism, I'm not sure just one is going to be enough to really instill confidence here from the greater public. But we'll see what happens. Jessica Smith, appreciate you bringing us that.
