That doesn’t mean CEOs expect the next 12 months to be smooth sailing. Many anticipate continued high volatility as companies and consumers both try to adjust to a higher cost environment and changes in labor dynamics.
“I expect the economy to get worse in the next six months and then to start improving in the next six months, and by 1 year from now, we will be on the upswing of the recovery from a quick downturn,” says Bob LeFort, president of Infineon Technologies, Americas.
Many of the CEOs polled also expect considerable movement in the months ahead, with several conceding that what comes next is anyone’s guess.
Whichever view you adhere to, our data shows it depends highly on the sector in which you operate and the metrics you track. Some of the CEOs polled say fundamentals are good and demand remains strong, with supply chains getting back on track and the talent challenges normalizing. Others say the fragility of the current environment significantly heightens the risk that any other unexpected event occurring could send their sector tumbling.
Ask CEOs in the financial services and wholesale distribution sectors, and they’ll say demand is slowing. Construction and consumer manufacturing CEOs, on the other hand, report strong growth and volume.
Dennis Folden, president of Mcclure Engineering Co., tells us demand is high right now, and he expects it to increase “significantly” over the next 12 months, thanks to a “large amount of contracts and public work in the future,” he said.
Mike Rogers, CEO of Rogers & Willard, agrees: “Construction in Southeast is still very strong. A lot of government funded projects are starting to be put out for bid,” he said.
Overall, 82 percent of CEOs in that sector reported strong optimism for the future, with an average rating of future business conditions at 7.14—16 percent higher than the cross-industry average.
Meanwhile, 86 percent of CEOs in the financial sector say the opposite, sharing concerns over liquidity, credit tightening and the likelihood of a recession affecting their industry. In that sector, the average rating of business conditions 12 months from now is 4.43—28 percent lower than the cross-industry average.
Our April data further demonstrates that dichotomy with 34 percent of the CEOs we polled saying they are forecasting an improvement in the business landscape by this time next year, and 36 percent saying they are expecting conditions to be worse—30 percent said we’d be no better or worse by then.
CEOs haven’t been this divided since October 2021.