The Conference Board Measure of CEO Confidence, which had increased marginally in the first quarter of 2019, was unchanged at 43 in the second quarter of 2019 (a reading of more than 50 points reflects more positive than negative responses). 

"CEO Confidence was unchanged in Q2, and remains at a moderately pessimistic level," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. "CEOs' expectations for growth prospects in mature and emerging economies remain subdued, with no pickup anticipated in the short-term. CEOs' profit expectations have weakened compared to last year, with trade and tariff uncertainties and signs of a slowing global economy the likely causes of the deterioration."

CEOs remain moderately pessimistic about current economic conditions, with 13 percent saying conditions are better compared to six months ago, down slightly from 14 percent last quarter. However, only 42 percent say conditions are worse, down from 46 percent in Q1. CEOs were less negative about current conditions in their own industries compared to six months ago. Currently, 21 percent say conditions are better, up from 12 percent last quarter.  

Looking ahead, CEOs' expectations regarding the economic outlook also remained relatively pessimistic. About 13 percent anticipate economic conditions will improve over the next six months, compared with 14 percent in the first quarter. Meanwhile, 44 percent expect economic conditions will worsen, up from 42 percent last quarter. CEOs' expectations regarding short-term prospects in their own industries over the next six months were somewhat more pessimistic. Now, only 17 percent anticipate an improvement in conditions, down from 19 percent last quarter.

Global Outlook Still Pessimistic
CEOs' assessment of current global conditions remains negative. Sentiment about current conditions declined further for the US. Europe and China saw an uptick, but overall, sentiment was still very downbeat. Sentiment for Japan and Brazil remained relatively neutral for both countries, though Japan saw an uptick. Sentiment regarding current conditions in India improved and were the most favorable. 

Looking ahead, CEOs are still pessimistic about global growth prospects. India, however, remains an exception with short-term expectations improving marginally. Growth expectations for Japan, Brazil and the US were moderately negative, while CEOs viewed growth prospects in Europe and China the least favorably.

Profit Expectations Declined Considerably Compared to 2018
CEOs remain generally optimistic about profit expectations for the next twelve months, though much less so than last year. Now, about 69 percent expect profits to increase, compared to 91 percent last year. Executives in the durables industries are the most optimistic, with 75 percent expecting profits to increase, followed closely by CEOs in the nondurables industries, at 70 percent. Close to six out of ten CEOs in the service industries expect an increase in profits.

Among chief executive officers who expect profits to rise, 43 percent say market/demand growth will be the primary driving force, down from 62 percent last year. One third cited cost reduction, up from only 15 percent in 2018. Price increase was cited by 18 percent of CEOs, followed by new technology (cited by 8 percent) as the primary source of improvement in profits.