In Q4 2008, CEO confidence in the U.S. economy fell to a low of 48.7 points, down 23.7 points from Q3, the largest quarterly drop in the Vistage CEO Confidence Index’s five-year history. Notably, of the 2497 Main Street CEOs who responded, more chief executives than ever expressed reduced confidence in their own businesses.
To help their businesses survive and succeed during the economic downturn, Main Street CEOs are reducing their own salaries and refocusing their priorities. Fifty percent of CEOs are taking a personal pay cut to help their companies get through hard times. Of those who are taking pay cuts, 28% plan to give up more than a quarter of their salaries and 12% more than half. Forty percent of CEOs plan to become more personally involved in the business, particularly in sales, in 2009.
About 40% of CEOs surveyed said the level of confidence they have in their own businesses for 2009 is less than in 2008. About 35% pointed to declining sales revenues (while 28% said revenues will stay the same). More than 36% said they expect profitability to worsen in 2009 (31% said it will stay the same). These findings represent the sharpest decline in CEOs’ expectations for sales revenues and profitability in the five-year history of the Index.
Three-in-five CEOs expect the economy to continue to worsen in the year ahead, twice as many as in the previous quarter. Only 10% of firms expect the economy to improve during 2009, while 61% do not expect a recovery to happen until 2010, and 28% in 2011 or later.
One-third of all CEOs reported lay-offs in their companies in the past year, and an additional 32% anticipated fewer total employees by this time in 2009. While this is by far the worst job outlook since the introduction of the national index in 2003, more than a quarter of Main Street CEOS (27%) said they still intend to hire new employees in 2009.
Back to Breaking News