The Conference Board Measure of CEO Confidence, which reached prerecession highs in the first quarter, declined for a second consecutive time in the third quarter of 2017. The Measure now reads 59, down from 61 in the second quarter (a reading of more than 50 points reflects more positive than negative responses).

"CEO confidence declined again in the third quarter and has cooled since hitting pre-recession highs at the start of this year," said Lynn Franco, Director of Economic Indicators at The Conference Board. "CEOs still rate current conditions in the US favorably, but their short-term expectations for growth have eased. CEOs also remain optimistic about the growth prospects for both mature and emerging economies, but expectations for Brazil are moderately negative. Regarding spending plans, about 29 percent of CEOs say they have boosted their capital spending plans since January and only 14 percent claim they have scaled plans back."

CEOs' assessment of current economic conditions was mixed. Currently, 56 percent say conditions are better compared to six months ago, down from 60 percent in the second quarter. Business leaders, however, are more positive in their appraisal of current conditions in their own industries. Now, 53 percent say conditions in their own industries have improved, up from 47 percent last quarter.

Looking ahead, CEOs' optimism regarding the short-term outlook for the economy is slightly more pessimistic. Currently, 39 percent expect economic conditions to improve over the next six months, compared to 41 percent last quarter. However, 14 percent expect economic conditions to worsen, compared to 3 percent last quarter. About 36 percent of CEOs anticipate an improvement in their own industries over the next six months, down from 48 percent in the second quarter of this year.

Global Outlook

CEOs' assessment of current conditions for the United States moderated from levels seen in the second quarter, while their assessment of current conditions for Europe and Japan were more positive. Despite a slight decline, CEOs' assessment of current conditions remains positive for India. Sentiment for China was neutral, while Brazil held steady but remains slightly negative.

Looking ahead, CEOs' short-term expectations for the United States and Europe remain positive, but less upbeat than last quarter. Expectations for India improved slightly, while sentiment regarding China and Japan remained slightly positive. The outlook for Brazil continued to deteriorate. 

Capital Spending Plans Up Moderately

About 29 percent of chief executives report increasing their companies' capital spending plans since January of this year, while about 14 percent claimed to have scaled back spending, based on a supplementary question. In 2016, when we last asked this question, 23 percent of respondents had increased their capital spending plans and an equal portion of respondents had made cuts. An increase in expected sales volume was the most common reason given for increasing capital investment plans.